LEGAL SERVICES PROTECTION GAINS MOMENTUM

The vast majority of Americans will encounter a need for legal services at some point in their lives. Sometimes the needs are predictable, such as estate planning matters. Other times they can be unexpected or traumatic, like traffic violations or elder care issues. Many people don’t deal with legal matters until they have to—fearing both the cost and the complications of choosing an attorney.

The uncertain costs of legal matters and uncertainty about how to deal with them can be a significant source of stress for workers. It can also be an employee benefits opportunity.

More than 50 years ago, PPLSI (Prepaid Legal Services, Inc.) introduced a product designed to ease the financial and logistical burden an individual faces when handling legal issues. The idea was that by having a committed legal resource available in advance, a person is more likely to seek help when needed and doesn’t have to start a lawyer search from square one.

Eventually, PPLSI, the company, assumed the same name as the product, LegalShield. Following decades as a publicly owned company, LegalShield and its sister company, IDShield, are now owned by MidOcean Partners, a private equity firm.

Currently, some 45,000 employers offer Legal-Shield as a voluntary benefits product. Enrolled workers and their families gain access to a pre-approved attorney in their area for consultation on a range of legal matters. The 39 law firms in LegalShield’s network are located throughout the United States. They employ some 900 attorneys with an average of 22 years of experience.

Emily B. Rose, president of business solutions for LegalShield, says, “Our proposal activity has nearly doubled in the last five years, and the number of group customers we’ve added in the last five years has more than doubled.”

Still, she considers the market to be considerably undersold. “We estimate that only 5% to 7% of employees have access to legal services through their employer.

“The employers offering LegalShield plans range in size from under five employees to hundreds of thousands of employees,” Rose says. “Likewise, the brokers we work with range from small firms up to national brokers.

“Employees want to tailor their benefits to their specific needs,” she adds. “They’ve been able to do that with supplemental health products. Legal services protection presents a similar opportunity, but unlike some supplemental health products, LegalShield has appeal across all age demographics.”

LegalShield works with brokers and plan sponsors to choose one of three levels of legal services to offer to all of a plan’s members. “Our approach is to not overwhelm employees by having them choose from multiple legal plan features at an enrollment. So, each employer selects a single plan, which is simpler for employees to understand,” Rose says.

Once enrolled, the plan participant has digital access to the law firms to respond to their individual needs.

This year, LegalShield commissioned a survey of several hundred full-time workers (non-LegalShield customers) to gauge the overall market for legal services coverage. It found that 79% of the workers had faced a major life event that would often benefit from legal help—from estate planning to debt issues. Most of them (71%) did not seek help. About 25% of them had taken time off from work last year to address personal legal matters.

About half of those surveyed (49%) reported that their legal matter added stress to their personal or professional lives. Those who obtained legal counsel (58%) reported significantly lower stress levels.

“There can be two major sources of stress,” says Rose. “First, the stress of the legal issue itself, and then the stress of figuring out who is going to help you deal with it. LegalShield gives employees an affordable, easy-to-use option for dealing with legal matters—both those planned and those unknown. It’s the alternative to not dealing with a legal matter or handling it on your own.

“Even estate planning can be stressful because people have a hard time confronting the choices involving their mortality,” she adds.

Estate planning is also the most commonly utilized service under LegalShield’s plans; “It is intended to be used,” says Rose. Other covered areas of law, such as debt collection, civil litigation, traffic violations, etc., are the surprise variety that an employee hopes not to need. In either case, the employee can contact a lawyer in the network who is already committed to providing service.

Rose says business retention is strong among employees who use the LegalShield protection for a pre-planned purpose such as estate planning. “They see that the product has worked for them and end up staying with it.”

LegalShield promotes both retention and new business by providing plan sponsors with educational material. “We keep the product in employees’ minds throughout the year with campaigns in support of ‘National Make a Will Month’ and ‘National Homeownership Month,’” says Rose.

Overall, the areas of legal services utilized most under LegalShield are: estate planning, home renovation, home purchase, residential leases, landlord problems, elder care, moving traffic violations, children entering college and debt collection.

During 2020, as families adjusted to the COVID outbreak, the company experienced an overall increase of 7.5% in requests for service over the prior year. The following areas had the most dramatic increases in utilization in 2020: estate planning (26%), landlord/tenant issues (22%), family law (22%), and consumer finance (13%).

Among Gen-Z workers (currently up to age 27), the effects of the pandemic over a three-year period were much greater. LegalShield data shows that between 2019 and 2021, Gen Z requests for landlord/tenant legal help rose by 233%; estate planning (158%); civil litigation (157%); family law (147%); and consumer finance (105%).

Over those same three years, millennials (currently ages 28 to 43) increased their utilization of landlord/tenant services by 71%; real estate by 59%; and estate planning by 49%.

More recently, inflation and other macroeconomic factors have influenced the demand for legal help, Rose explains. Higher prices for homes and apartment rents have raised the stakes in real estate and residential lease transactions.

“Other consumer protection disputes can arise because people are making more purchases sight unseen—including cars, even,” Rose says.

“We’ve also seen a shift in demand for elder care services. More people are helping their parents review their estate plans, navigate through Medicare and Medicaid options and handle other aging issues. In particular, among our Gen-Z customers, the interest in elder care services has risen dramatically over the last two years. This generation is really focused on caring for parents and grandparents, which, frankly, surprised me.”

Among Gen-X workers, Legal-Shield’s elder care law requests increased by 27% over the past three years, reaching a new five-year high. Elder law requests from millennials have risen by 56%.

LegalShield’s network of law firms is shown at its website, along with career details of the participating lawyers. LegalShield follows up with plan participants who have used the law firms’ services to monitor satisfaction with completion of legal work and response time.

“Employers are seeing the value of a more robust benefits package,” says Rose. They also are looking for add-on products that support overall employee wellness. “LegalShield reduces employee stress by giving them a pre-planned and economical way to deal with legal exposures.”

The author

Thomas A. McCoy, CLU, is an Indiana-based freelance insurance writer.