We’ve heard it a million times: the US is a litigious society – we’re lawsuit crazy! Last year, Faces of Lawsuit Abuse posted their top 10 most ridiculous lawsuits and there are some doozies. How about the grown man who sued his parents for their “indifference” to his problems (to which I say, “If I had a nickel for every kid who felt indifference from their parents…”) or the dad who sued the county for $40 million because his son was kicked off the track team for excessive absences?
However, there are some perfectly warranted lawsuits – and now that I’m in my forties, it seems like there’s a good reason to chat with a lawyer monthly. Unless you have a brother-in-law who’s a lawyer, who do you call?
I’d suggest a legal savings plan for 2 main reasons: 1) it gives you a place to go when faced with a legal issue and 2) it can provide significant savings.
I’ve had one for about 5 years, so I’m sharing some frequently asked questions and my typical super simple answers…
What is a legal savings plan?
Most legal savings plans are made up of a network of attorneys who agree to offer their services at discounted rates in exchange for more traffic. As a legal savings plan member, you pay a small fee each month to have access to these lawyers and their lower rates.
Why do lawyers do it?
Think about a Costco membership. If I’m a legal savings plan member, the participating lawyers agree to give me a discount on advice and services like traffic ticket defense, a will, name change, bankruptcy, divorce, etc. These discounts are ONLY given to you because you’re a legal savings plan member.
Why do legal savings plans exist?
These plans are another form of marketing. Every day, lawyers advertise to get new business. Instead of paying for more advertising, they agree to be part of a network and give a discount because of the huge member-base and consistent traffic being sent their way. So, like a Costco membership, they pass along significant savings to their members rather than paying more advertising dollars.
What kind of discount can I expect?
For most legal plans, there are 3 different types of discounts.
1) free services included for being a member – like phone consultations, one-on-one consultations, review of a short legal document, writing a letter or making a call on your behalf, etc.
2) discounted one-time rates for common legal issues – like traffic ticket defense, wills, simple divorces, bankruptcy, etc.
3) discounted hourly rates for more complicated legal issues – for instance, I used the service to review a long contract and saved 40% off the hourly rate.
What should I look for in a legal savings plan?
1) A plan with a long history and trustworthy reputation in the market.
2) A broad range of services offered and deep level of discount (some are as high as 40%). Because you never know what you’re going to need, look for a plan that provides the 3 types of discounts listed above.
3) An adequate amount of lawyers and specialties in your geographical area. You don’t always need someone local, but when you do, it’s good to know they’ll be close.
4) An experienced network of lawyers. Some legal savings plans tout the years of experience of the lawyers in their network.
How much is a typical legal savings plan?
The price depends on the answers to the questions above. Some are as low as $10 and can go up to $25+ a month. Some are bundled with other security services, like identity theft protection.
How does it really work?
Below are just a few real-life examples of how it works and what a legal savings plan might do for you…
Kevin has a wife and 3 kids and needed a will. He called the main line to his legal savings plan where he found them to be pleasant, quick, professional and he was directed to an attorney in his area. When he called the attorney, they had a 15-minute phone conversation to cover the process. He and his wife completed the necessary forms and sent them to the attorney. They sent a check and their wills were on the way. He says the whole process was quick and simple. By the way, if you don’t have a will, check out this recent article where we share 5 simple reasons you need one!
2) Contract disputes
John didn't know he’d hired a bad tax guy until the IRS contacted him 2 years later to let him know he owed money! At that point, he wanted a refund of his tax preparation fees. So, he wrote 3 letters requesting his money back and received NO response. He finally used his legal savings plan to help resolve the situation. He called the main line to his legal savings plan, explained his issue and was connected with a local lawyer. The lawyer wrote a letter at no charge to John who immediately received a response and a full refund from "bad tax guy."
Jack was going through a divorce, so he called the main line to his legal savings plan and was given the phone number for a local divorce attorney. With the plan’s discount, Jack’s initial consultation was free and the price was $499 to file an amicable divorce - which included the court filing fees, paperwork, etc. During the process, however, his soon-to-be ex-wife got her own attorney and the situation moved to being “amicable” to a contested divorce. Jack’s attorney then switched to an hourly rate, which was just $125/hour vs. other divorce attorneys that Jack previously interviewed who were charging $250-350 per hour.
Two years ago, Patty paid a company a one-time annual fee to oversee her technology needs. Last month, she noticed a $200 unauthorized debit from her bank account for another annual fee which she never agreed to. She tried contacting the company multiple times and was never provided answers about why she was charged or who authorized the charge. Also, she had changed companies the previous year and was no longer in need of this company’s services. She called the main line to her legal savings plan and was directed to a local attorney – he consulted with her for free, confirmed her diagnosis that this sounded like an inappropriate transaction and advised her on next steps to handle the situation on her own. Patty is happy to know the lawyer is there if she needs further help.
Now, the only question is: what will you do with all that money you save?
It’s your turn. Are you or have you ever been a legal savings plan member? Did you find it useful or not? Did you save money or not?