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What is a Legal Service Plan?

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  • Written By: Charity Delich
  • Edited By: Bronwyn Harris
  • Last Modified Date: 08 November 2016
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A legal service plan is an arrangement in which plan members pay a set membership fee in exchange for having a professional network of lawyers on retainer. Most legal service plans offer members advice on a variety of basic legal issues, such as buying or selling a house or car, drawing up a will, handling simple divorce proceedings, or purchasing a small business. Other areas often covered by these service plans can include bankruptcies, adoptions, insurance claims, and landlord-tenant disputes. In general, a legal service plan is most beneficial for individuals who have frequent basic legal questions. Small businesses can also benefit from these plans, realizing significant cost control as well as access to timely legal resources.

Most legal service plans are pre-paid and require members to pay annual or monthly membership fees up-front. Once the fee has been paid, members can access certain legal services as needed. Some companies, unions, and other membership groups offer employees or group members the ability to join a legal service plan at a reduced cost. A family service plan may be offered by some legal service companies, allowing family members to pay reduced membership fees.

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In general, a legal service plan is staffed by a network made up of lawyers in private practice or small law firms. Most service plans cover only fundamental legal issues as part of their basic service offerings, and they will charge additional fees for more complex matters. Before signing a legal service plan contract, an individual or small business owner must fully understand the compensation scheme as well as which services the basic membership fee includes. In addition, potential members should be aware of whether there is an annual or monthly cap on the number of legal questions included in the membership fee.

Most plans consider basic services to include general legal consultations, which are usually held over the telephone. In addition, basic services typically cover review of straightforward legal documents, simple will preparation, and letter writing to an adverse party. More comprehensive services, which often require additional fees, can include trial services, bankruptcy court representation, or complicated real estate issues.

Finding the best service plan can be a challenging task, and potential buyers should do their homework prior to shelling out money for membership fees. A potential legal service plan should have a solid track record and be well-known in the legal community. In addition, the plan should allow a member to change lawyers if the member is not satisfied with the one assigned to his or her case. The plan should also spell out which services are included and explain any potential out-of-pocket costs that a member can incur. Finally, the plan should have a mutually agreeable process for resolving any member grievances.

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