What Are the Types of Prepaid Legal Services?
Prepaid legal services are similar to a health insurance plan. For a monthly fee, participants are able to use a specified network of attorneys and paralegals for free or low-cost legal services. This can be anything from a simple document review to representing a participant in a court proceeding. Through the prepaid legal plan, the participants are able to access legal services they might not be able to afford on their own.
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Lower Hourly Rates
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The main benefit of prepaid legal services are the lower hourly attorney fees that are charged to participants for any services over and above the minimum covered by the plan. Without the prepaid plan, these hourly fees can become financially crippling if a participant is involved in a court case or difficult contract negotiation. Most plans offer a discount of 40 percent to 50 percent off of the average attorney's rate for a similar service.
Document Services
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Documents such as real estate agreements, collection letters or employment contracts can generally be reviewed for free. There may be a limit on the number of no-cost document reviews that can be requested during the year. Other documents like a power of attorney, will or trust may also be prepared by the plan's attorneys for a reduced rate.
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Consultations
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Consultations with the plan's attorneys are another attractive benefit provided by prepaid legal services. It is similar to having an attorney on retainer that you can call about any matter, but you only have to pay the monthly premiums instead of a large retainer fee. Most plans include a cap on the amount of consultation hours that are included at no charge. For in-person meetings with the attorney, this cap is usually 30 to 60 minutes.
Reduced Contingency Fees
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The monthly prepaid legal premiums may entitle participants to representation in certain types of cases at a reduced contingency fee. In personal injury or collection cases, attorneys generally work on a contingency basis. That is, they get paid a percentage of the amount awarded to the plaintiff at the end of the case instead of receiving hourly fees along the way.
Warning
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Do your research before signing up for a prepaid legal plan. The recent growth of the industry has attracted many independent companies who may not provide qualified services. Ask for a list of the attorneys participating in the plan and their areas of expertise. Find out if you will be able to use the same attorney throughout the entire case and if you have the option to switch if you are not satisfied with an attorney's services.
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