Cut-Rate Legal Eagles

It was a tension-cranking, nerve-jangling awareness of the ticktock of her attorney’s clock that drove Bonnie Brewer out of the mainstream legal system.

She could not bear to think of the bills she rang up every time she called her lawyer with a question about her rental properties or confusion about her rights as a grandparent. She needed advice--but not at $175 an hour.

So Brewer turned away from the traditional legal setup--a full-service attorney charging by the minute--and joined the swelling number of middle-class Americans demanding quicker, cheaper and more efficient alternatives.

She and her husband signed up for a legal insurance plan and now they have access to unlimited phone consultations, free letter writing, free advice on negotiating and discounted rates for litigation--all for less than $10 a month.

Such plans have steadily gained converts, covering 88 million people--a third of all Americans. And they are just one aspect of a growing movement to serve middle-class legal needs more cheaply by delivering on-target advice without full-service frills.

Southern California’s Tele-Lawyer service, which doles out phone advice at $3 a minute, racks up about 2,000 calls a month. Independent paralegals report booming demand for their document preparation services. And pioneering attorneys such as Forrest S. Mosten of Los Angeles have “unbundled” their services so clients can buy detailed research, courtroom advocacy or simple advice without signing up for full legal representation.

“People are demanding that the judicial system be accessible,” said Justin Swingle, a landscape architect who is pressing a medical malpractice lawsuit with a boost from hotlines and self-help books.

The new look of legal care responds to a long-documented need. As UCLA Law professor Richard H. Sander put it: “An awfully large segment of the American population does not have access to the legal system.”

Free Legal Aid clinics and public defenders who represent impoverished criminals have struggled to continue to provide services amid budget cuts. Still, the poor can usually get some public help when they land in legal trouble. Moderate-income clients have fewer options.

In its 1994 report “Legal Needs and Civil Justice,” the American Bar Assn. reported that more than half of moderate-income households encountered at least one legal problem a year. Personal finance snafus, such as tax troubles or credit problems, topped the list, followed by housing disputes, community battles and family crises.

But nearly two-thirds of those reporting legal problems said they did not hire a lawyer or approach the civil justice system. Most decided that an attorney would not be able to help--or would charge too much. Others decided that their problems were not serious enough to push through the legal system, or reasoned that they would be better off handling things on their own.

Lawyers are “still not the most popular guests at a dinner party,” said attorney Laurie Zelon, president of the Los Angeles County Bar Assn. “The challenge to our profession is to rethink how we deliver legal services so we can get them to the people who need them in a way they can afford.”

Perhaps the most sweeping response has been the growth in legal insurance.

Millions of assembly line workers, restaurant employees, teachers and other union members obtain such insurance for free as part of their benefits programs. Members of the United Auto Workers do not have to pay a cent for legal representation in most civil matters, including adoptions, real estate transactions or product liability lawsuits.

Outside union umbrellas, about 4.7 million Americans have signed up for more limited insurance coverage on their own.

Major credit card companies such as American Express and Montgomery Ward sell the plans. Some employers offer them, passing costs on to employees in payroll deductions of $6 to $20 a month. At Procter & Gamble, about 10% of employees choose to pay for a legal insurance benefit.

The big names in the industry--including Hyatt Legal Plans, Midwest Legal Services and Caldwell Legal USA--have been marketing the plans for at least a decade, some longer. One of the oldest, Pre-Paid Legal Services, was founded in 1972 and reported net income of $7.3 million last year, up 42% from the previous year.

For their monthly premiums, insured clients generally get free consultations and some basic services (such as a simple will, updated yearly), plus reduced rates on more complicated transactions.

To critics, the deal sounds too good to be true. They say that insurance plans must be bait-and-switch scams, with lawyers forcing costly services on clients to make up for the freebies.

And indeed, some customers complain that they must stand firm to avoid being suckered into paying ever-escalating fees for extras. They might come in for a free will only to be told they need an expensive add-on, such as a living trust, to protect their children. Or they might take advantage of a “discount” referral only to see a better price advertised somewhere else a few weeks later.

“I don’t think the services are all they’re cracked up to be,” said Linda Sorenson, who dropped her $6.50-a-month insurance after deciding that even the discount prices were too high. Her biggest complaint: Her lawyer always seemed too busy to give the free consultations she had been promised. “He just never got back to me,” she said.

Consumer advocates warn customers to evaluate attorneys’ credentials before signing up for a plan. Some of the 23,000 people who participate in insurance programs may be top-notch professionals seeking to expand their mailing lists. Others may be struggling novices eager for a few extra dollars a month.

A few plans, mainly those organized by unions, keep staff attorneys on salary. But in most cases, lawyers in legal insurance programs are like doctors in HMOs--they receive a small monthly fee for each client on their roster. To make money, they must rake in referral business or keep down the cost of serving insured clients.

The pressure to keep costs low drove Grass Valley attorney Joseph J. Bell out of his post as a lawyer for the United Auto Workers insurance plan. The plan paid him $60 to $75 an hour and restricted the time he could spend on each case, forcing him to ration services or take a loss on long, complex matters.

“I felt that ethically and professionally, I had to give the same level of service [to insured clients] as I did for my clients who pay me $175 an hour,” Bell said. “Economically, it wasn’t worth the time and effort.”

Clients such as the Brewers, however, say they never have felt that their insurance plan lawyers were trying to brush them off or limit services.

Covered by Caldwell Legal, which is based in their hometown of Sacramento, the Brewers praise their attorneys for negotiating grandparents’ visitation rights, untangling an out-of-state probate matter, and helping them manage their investments. Their lawyer even researched their rights--which turned out to be scanty--when police bashed in the door of one of their rental properties while looking for a suspected criminal.

“It’s different from when I call up my [accountant] and say, ‘Hi, John’ and he says, ‘Click, the clock’s running. Now what can I do for you?’ ” Bonnie Brewer said. With the legal plan, she added, “you actually feel you have someone in your corner.”

Developing that sense of security for more of the middle class may be the most important goal of the emerging revolution in legal care, analysts say.

Assembly line workers and pen-pushing professionals have long viewed lawyers as antagonists to be consulted only as a last resort. Reformers want to make legal services so user-friendly that the middle class starts turning to attorneys early on, to root out troubles before they sprout into crises.

“Wealthy individuals and big corporations do it routinely,” said William Bolger, executive director of the nonprofit National Resource Center for Consumers of Legal Services. “We’re trying to give that same advantage to the average person.”

Drawing on the medical system for analogies, Bolger and other reformers push “preventive legal care” and “legal checkups” for the middle class.

Just as a conscientious patient gets a blood pressure test even when feeling healthy, a diligent client should consult an attorney even when facing no lawsuits. In theory, annual checkups could help a client determine if a will needs updating or a contract needs revising--or if an unforeseen legal disaster lurks around the corner.

The concept may sound self-serving. After all, the more a lawyer advises, the more he or she earns. Yet attorneys sense more pitfalls than profits in the concept. Engaging in preventive law, they fear, will leave them wide open to malpractice claims.

After all, what client could have a better malpractice case than the one who receives a “clean bill of health” during a legal checkup, then hits a slew of legal woes from contracts his lawyer never examined?

The same malpractice fears also prompt many attorneys to demand total control of a client’s legal affairs.

Take, for example, a woman involved in a contested divorce. She may want to research her options, maybe file her own documents and draft her own motions. But she may believe that she needs a lawyer to represent her during court hearings. An attorney who agreed to that limited role could land in hot water. If the woman botches her case, she could file a malpractice suit against the lawyer for failing to steer her straight--and under current law, she could win, even though she had insisted on handling everything but the court hearing on her own.

“It’s not simply that lawyers are greedy and want to bilk money out of their clients,” said Joseph Bell, chairman of the state bar’s committee on legal services. “There are real serious potential malpractice claims for doing a little something on a case and not following through.”

So when they take a case, most lawyers feel obligated to take it all.

“It’s as if you go into Sears saying, ‘I want to buy a toaster’ and the salesperson says, ‘Fine, but you’ll have to buy your refrigerator, your washer, your dryer and your dishwasher at the same time,’ ” said Michael Cane, president of the Tele-Lawyer hotline. “If you want to just ask [the lawyer] a simple question, he’ll say, ‘No, I can’t do that. I’ll need to write all your letters, negotiate your contracts, etc., etc.’ ”

That approach, reformers argue, turns off people who want some control over their case and their bill.

To reach those frustrated self-helpers, Los Angeles attorney Mosten has developed a strategy he calls “unbundling.”

His clients sign a four-page contract spelling out precisely what they want him to handle--a document he hopes will protect him from malpractice claims. Viewing himself more as a coach than a boss, Mosten gives clients free access to his legal library so they can research their problems and figure out when they need professional aid.

A family law specialist with 17 years of experience, Mosten charges $350 an hour. But he works only as long as the client demands. If someone wants him to spend half an hour researching a topic, Mosten will do it, although he warns that he will not have adequate time to root out all the issues.

For working-class clients, $350 an hour might sound too steep, even if they can control their final tab. Unable to afford a lawyer, 11% of litigants who appear in Los Angeles County’s civil courts represent themselves. The percentage soars much higher in traffic, small claims and family law courts.

Although local figures are not available, the American Bar Assn. estimates that in 92% of divorce cases nationally, at least one party lacks a lawyer.

To help these lawyerless litigants, a new class of services has emerged. One judge dubs it “legal advice lite”--technical support to help people present their own cases in court.

Independent paralegals, one source of such help, are not allowed to give legal advice. But they can prepare court documents and take care of simple procedures such as wills, guardianships and bankruptcy. A child custody order might cost $100, an uncontested divorce, $300. Some paralegals will even file the documents in court, saving the litigant the hassle.

Turning to paralegals can be risky because they are not certified by the state. No special training is required, and no watchdog group regulates the industry. Anyone can hang a shingle.

Cash-strapped litigants wary of paralegals have several alternatives, including dialing up a 1-900 hotline to get advice from attorneys.

The strategy worked well for lamp repairman Brad Douglass, who turned to Tele-Lawyer in desperation after his real estate agent moved to repossess his West Los Angeles house. While one lawyer gabbed a bit much for his taste (“I didn’t want to make chit-chat at $3 a minute”), Douglass said he usually received crisp, coherent advice for a few dollars. The guidance gave him the confidence to handle the problem himself; he settled accounts with the agent after $200 worth of calls to Tele-Lawyer.

“It saved me,” Douglass said.

Equally impressed, the American Bar Assn. last year gave Tele-Lawyer its national award for improving legal access. And Cane reports that calls to his hotline have been jumping about 15% a month over the last six months.

The inspiration behind all these low-cost legal services, from unbundling to hotlines to paralegals, is the traditional self-help book, which celebrates its silver anniversary this year.

When Berkeley-based Nolo Press published the first “How to Write a Will” guide in 1971, pundits gawked. The establishment simply could not believe that regular people would dare tackle legal problems without bar-certified lawyers at their sides. But the idea took off: Nolo offers more than 100 popular texts and software packets explaining everything from patenting an invention to filing for bankruptcy.

Nolo co-founder Ralph Warner considers the books trailblazers in accelerating the drive to transform legal services. “You start forging a path, it turns into a road, and soon everyone starts following you down it,” he said.

And Warner predicts more innovation ahead: “If lawyers are charging $200 an hour, there are all kinds of services to be invented for cheaper.”