Legal service plans have been around for decades. But over the past few years, the industry has seen changes-and increased interest. Agents and brokers who understand legal plans and their features may find opportunities to help businesses and their employees find a new and valuable protection.

According to Dennis Healy, chief sales officer at ARAG, the biggest recent change is "activity." He explains, "In the group insurance world, we've seen a tremendous spike in the number of RFPs for legal plans for employer groups. The number of RFPs we've had this year over last is up 60%, and that's dramatic."

Healy says employers are showing interest not only in legal plans, but also in identity theft coverage. "Identity theft has massive buzz around it," he notes. "With all the data breaches taking place, and increased awareness around them, we're seeing considerable activity there."

His firm recently added identity theft protection to its legal insurance offering. "In addition to legal insurance coverage that helps with just about anything from a legal standpoint, customers also get comprehensive identity theft protection," Healy says. "If you have a significant identity theft issue, you'll probably need a lawyer somewhere along the way, so they're very complementary coverages."

Technology is having other effects as well. "Consumers are demanding new, improved services with greater, more affordable access," explains James Rosseau, president of Business Solutions for LegalShield. "Consumers want to use technology to communicate with their lawyers, and lawyers are responding."

He points out that the American Bar Association (ABA) is focused on these changes and technological advances with the Commission on Future of Legal Services, which is expected to issue a report early next year. "The ABA's Futures Commission is focused on improving access to more people to legal services, and they are thinking creatively," he says. "Everyone agrees that more people need more access to more affordable legal services."

Rosseau stresses the importance of blending technology and personal engagement. "While legal plans are not new, the trend and focus, technologically speaking, is in its infancy and there's still much to learn and observe," he says. "But it's intriguing, due to the fact that the legal system can be very complex and it likely will require a physical attorney at some point, especially for legal matters that result in litigation."

Increased consumer use of mobile devices has driven a change at Rosseau's company. "Data show that, by 2020, approximately 80% of adults worldwide will have a smart phone," he explains. "We've embraced the move with the release of member apps for our LegalShield and IDShield products."

Popular benefits

According to Rosseau, LegalShield offers legal service plans for individuals, families, small businesses and commercial drivers. "Our supplemental services for individual and family plan members can provide additional coverage to those who have business legal needs due to an additional stream of income beyond their 'day job' or full-time job or additional trial defense coverage for those who like to have an additional sense of security and preparedness," he says.

"There are myriad things we can help customers with," says Healy. "Those range from wills, trusts and estate plans to consumer protection issues, property transfers, adoptions and more. We try to cover almost anything you can think of in our program." For example, his company offers a financial service coverage that helps people deal not only with financial planning or education but also with debt remediation or consolidations. A caregiver services coverage helps clients navigate various issues surrounding aging.

Among the legal service product offerings, several features are used most frequently. "Most of our members find the phone consultation on an unlimited number of personal legal matters to be very useful," Rosseau says. "Also, members frequently call on their Provider Law Firm to review personal legal documents, which is free for documents less than 15 pages in the personal and small business plan. Additionally, will preparation is included with membership in either of the personal LegalShield plans."

In 2014, he adds, the most frequent areas of law his firm's customers experienced and then requested assistance on were, in order of intake volume: consumer and finance, estate planning, family law, landlord/tenant issues, real estate and traffic.

"Wills are tops," says Healy. ?"When we have a group plan, in that first year many people buy the coverage knowing they need a will done effectively, efficiently and economically. So they'll take advantage of that right away." Consumer protection also is big-helping people deal with disputes with product or service providers.
Another popular area is property transfers. "When someone is dealing with buying or selling a property, getting a mortgage, or anything in the process that requires contracts, people like to have the services of a qualified attorney," Healy observes.

Engaging employers

Healy points out that employers in virtually any sector are good matches for legal plans. "Unlike other insurance products that focus on the population's age or income, for instance, any employer group will have people who are a good fit with legal," he says. "Different demographic makeups find different parts of the policy more attractive."
For example, retail and food service operations have a lot of hourly employees dealing with everything from speeding tickets to credit or landlord issues. "They may have less experience with attorneys and be interested in guidance from a legal insurance provider if they get a ticket," he says. "Individuals with lower salaries may also benefit from debt remediation or consolidation services." Employers may find higher-income employees to be more interested in using legal counsel to help with estates and wills, trusts, transferring property or adopting a child.

Rosseau encourages agents and brokers to point out the employer's role in meeting fiduciary responsibilities. "Employers have a responsibility to do what is in the best interest of their employees and the provision of a legal plan is one way they can fulfill that," he remarks.

"With plans in place, whether the employer sponsors it or offers it as a voluntary benefit, the employer can promote usage for forward-looking and preventive matters like estate planning or reviews of household contracts, such as auto insurance, home insurance, general contractors for home improvements, and more," he says.

Profit angle

Healy concurs. "Employers need to understand the absenteeism and presenteeism associated with legal and related issues," he says. "Offering resources to help employees navigate problems more quickly and efficiently helps them get back to work and focus on the job they're paid to do."

For example, he says, if someone's parent is experiencing a caregiver issue and needs to find a home health aide, they may not know where to start. "Any obstacles they encounter will take a long time to figure out," Healy notes. "Providing them a patient advocate to help them find a provider quickly and negotiate a discount helps get the employee focused on work and be productive more quickly. And every company is in business to be productive."

Employee buy-in

Agents and brokers should point out that legal plans let employees "complete the circle of protection for themselves and their families," Rosseau says. "Similar to an HMO for health matters, it gives employees a way to properly and proactively ensure that their legal matters are in order and to have legal assistance at the ready 24/7 for matters they need to react to."

Healy stresses the importance of terminology. "With our plan, we encourage agents and brokers to make sure employees understand we're talking about insurance," he says. "People understand and respect that, and they know it's protection."

He also encourages the use of product features at the point of sale. "Make sure, at the moment they're deciding to buy, that there's a clear and comprehensive explanation of what's included. For example, if someone is going through enrollment and legal pops up, you want to have messaging right there that explains what they're buying and what immediate use it offers."

For example, he notes, "If someone sees wills or estate plans on the list, and they know that's something they need to address, they're most likely to buy. Or perhaps they're buying a house or they have debt issues. People may relate to that. Different things appeal to different people at different times in their lives."

Closing thoughts

Rosseau encourages agents and brokers to consider offering legal plans because, he says, "It's early. Legal plans have been in the marketplace for a while now, but we're still in the early days in terms of its becoming an employee benefit. While other products have been in the market for some time and are essentially saturated by category, this is a green field for agents and brokers."

He offers a number of reasons for agents and brokers to engage. "Some agents, particularly those offering health or P&C products, believe that legal plan commission structures aren't as compelling as their other products.

However, when they review our commission structure, both new and renewal rates, they find our compensation to be among the most competitive."

Guaranteed issue is another consideration. "Our products have no underwriting and thus are guaranteed issue," Rosseau says. "Also, our legal plans do not have any claim forms involved. Members simply dial their law firm to access service."

He points out that administration is very simple for the employee. "The benefit is paid month to month, no matter how we sell it," he explains. "Whether it's paid for via bank draft, credit card or employer deduction, the service can be canceled at any time. There are no long-term contracts or claim forms to fill out."

Healy says the product is easy to sell and manage. "When you offer a legal program, we come in with the marketing builds," he explains. "We can partner with virtually any TPA out there. We like to have time to communicate in advance of open enrollment, but you can set up a legal plan very quickly."

In addition, he says, "The employer doesn't have to pay or do anything. We do the heavy lifting; the employer just needs to let us communicate the benefit and do payroll deduction. It's as simple as saying, 'Our employees will benefit from this plan, and we'd like to offer it.' "

Rosseau points out that fewer than 6% of employers offer legal plans. "The potential market is large, and good brokers can leverage the benefits we identify, perhaps with a frame of reference to the product being similar to an HMO, but for legal expenses," he says.

The author
Dave Willis, CPIA, is a New Hampshire-based insurance freelance writer and a regular contributor to Rough Notes.