A Legal Service With Mass Appeal
Which do you hate more: lawyers or HMOs? Now, you can hate them both equally thanks largely to Pre-Paid Legal Services Inc.
Actually, if the company’s growth rate is any indication, you might end up loving both much-maligned professions--that is, if you ever need legal advice.
The aim of the Oklahoma-based business, founded in 1972, is to offer the middle class an affordable means of obtaining legal representation.
Like an HMO, clients either individually or collectively through their workplace pay a flat monthly fee that covers legal costs in many cases. Or, for more major legal trouble, the fee makes you eligible for a discount on the hourly fees of network lawyers.
The legal fee service differs from state to state; the San Diego office charges a monthly fee of $25, say company officials. The client can discontinue the service at any time.
“A lot of people are afraid to call a lawyer, especially when they can charge hundreds of dollars per hour,” said Naomi Kockentiet, who works for the firm in San Diego. “This makes it much easier for people.”
Most of the company’s 886,000 national customers, represented by some 2,700 law firms in 47 states, use the services for small claims court. Other popular areas of representation for customers include taxes, wills, consumer issues, contract reviews, bankruptcy, custody cases and divorce cases.
“A lot of people use us for little aggravating things that come up, like your neighbor’s dog keeps barking,” said Kockentiet, who got a job at the company last year after the firm represented her interests against an auto insurance company. “People think they have to put up with it, but they don’t.”
Legal fee services are a common practice in Europe, say company officials, but for some reason they haven’t caught on in the world’s most litigious society. Although judging by the company’s expansion lately (Fortune magazine ranked the company 29th in its fastest-growing company list last year), it might not be too long before the idea is more popular here.
Although most local and state bar associations endorse the concept of these legal fee services, consumer groups urge potential customers to learn about the services before signing up. Consumer groups recommend asking a prospective company: Are you bonded? How many customers do you have? Who are the lawyers in your network? Do you have customer referrals?
