Pre-Paid Legal Services is in hot water again. Not a surprise to this Internet lawyer. The Federal Trade Commission (FTC) has apparently sent it a draft complaint that alleges the company has made misleading misrepresentations about its services. The company is also being investigated by the U.S. Securities and Exchange Commission (SEC).
No doubt I’ll get flamed for posting this, but did anyone expect this wouldn’t occur? Pre-Paid Legal is the K-Mart of legal services. If you can’t afford to pay for anything else, and don’t qualify for free (taxpayer funded) legal representation by Legal Aid, Pre-Paid Legal Services is better than no representation.
This brings us to the choices you make both as a consumer and a business owner between speed, price, and quality. You don’t get all three in the real world. At best you get to pick two. More often than not, you get one. And perhaps that’s all you want.
For example, you’d want the best heart surgeon you could afford. Quality would be your primary factor. Who cares if the doc on the next block is the fastest? You want the job done right. The same thing goes for when you retain an Internet lawyer or another type of attorney.
If you’re shopping for clothes for your kid who is outgrowing everything on a monthly basis, chances are you’d be focusing on price, i.e. quality wouldn’t be the prime consideration.
Late for work and your gas tank is almost empty, the closest filling station is going to be attractive because of speed even if you pay more per gallon. Your goal is to make it to work on time…not save an extra 40 cents.
Think about these factors each time you invest in a product or service. If you want speed, pick the fastest. Want the cheapest, go discount. Want quality, pick the expert.
I’d contend that most customer service issues arise from purchases made from a vendor whose primary benefit is not what the buyer considered most important.
What’s the solution from an entrepreneur’s view? Make it clear in your pre-qualification process what your strength happens to be.
As an Internet lawyer, my business law firm focuses on quality first and speed second (where it doesn’t affect quality). Only those who are willing to invest a little more for this qualify as clients. That’s okay. There are plenty of Pre-Paid Legal Services lawyers out there for bargain hunters.
What about your business?
What do you deliver? Price? Speed? Quality?
Are you clearly telling your prospects? If not, why not?
No related posts.
Good points, Mike.
I actually subscribed to PPL at one time (business and personal “plan”). I didn’t get it to replace regular local representation, but just as an additional “supplement” of sorts, given the modest price. Kind of like having an extra “catastrophic” health policy, just-in-case. It was an interesting experiment.
I did use it a few times, but mostly for quick opinions on “light” or more general matters. In other words, I would not have used the service for in-depth, customized assistance. It was just a bit cumbersome and of course there can be continuity issues when you can be assigned rotating attorneys.
One thing I will point out is that if you find yourself in a major entanglement of some sort, your adversary can easily find out that you are using a pre-paid legal provider. What this could infer is that you have limited means or resources, which might put you at a significant negotiating disadvantage.
However, as you say Mike, if someone has no other or very limited options, this type of service is certainly better than being without representation.
Thanks, Tom. Appreciate your sharing your experience with Pre-Paid Legal Services. There is a role for a company like it. But it is a price focus. Those who select it should know what they’re getting (or not getting).
Best wishes,
-Mike
Mike:
Your gratuitous sneer at Pre-Paid Legal, “Pre-Paid Legal is the K-Mart of legal services…” is unwarranted and self-serving.
Speed…an acquaintance had a legal problem and called a local attorney who said: “Yes, I can handle your problem…but I’m busy now, call me back in two weeks.” PPLSI (of Ada, OK) maintains a retained service program and participating legal offices are required to answer the phone in 3 rings and provide a qualified attorney within 8 business hours ready to work on your problem. In your practice, how many clients can you personally juggle before you have to prioritize and put some of them off for a week or two?
Quality…PPLSI provider law firms must be top-rated law firms in their state with a substantial number of attorneys on staff qualified in a broad spectrum of services. These are not K-Mart firms.
Price vs. Quality…two $1,000/hour attorneys go into court to do battle, but only one of them will win. What’s price got to do with it? They wouldn’t both command $1000/hour if they always lost their cases
Price…Your neighbor decides to sue you over some stupid irritation. With PPL, you have at least 60 hours of PPLSI trial services in the bank. Your neighbor opens the Yellow Pages and finds a $500/hour attorney to represent him. At that rate you have $30,000 of pre-paid legal support already paid for (@ $204/year), and, if the trial runs longer than that, you still have legal support at a negotiated rate substantially lower than $500/hour. Tell me again: who has the advantage and who is more likely to seek a settlement?
Quality…You run a small business that ships products throughout the country. Is your brother the attorney licensed and qualified to practice law in all of the 50 states and Canadian provinces? With PPLSI you have immediate access to qualified attorneys in all those locations and all of those have access to more than 100,000 pre-retained specialist lawyers for the same price ($204/year). Which approach is the more professional and cost-effective?
Price…PPLSI has law firms that are participating MEMBERS. That’s right, they have law firms that have purchased the Small Business plans. Why, because even attorneys who charge $500/hour cannot afford $500/attorneys! It’s a lot more cost-effective to let their provider law firms do routine debt collection.
Mike, without knowing you, I’ll grant you’re a good attorney worth what you charge many of your clients, but I would suggest that what you provide a number of them is not so much legal counsel as it is psychological support and an understanding shoulder. Their grandmother can provide that! Some people need a lot of hand-holding and frequent pep talks. They should hire you. They want a divorce lawyer who will agree with them and refer to their spouse ‘that bastard!’ The truth of the matter is that almost all of the legal work PPLSI provides is done very effectively by low-emotion telephone/mail/fax and without a lot of expensive “strum und drung.” My wife and I have used our PPL service to settle my father-in-law’s estate when he passed away this summer, to manage the sale of his home in NY (we’re in VA), to prepare various papers to help me assist my elderly mother (101) recover from identity and credit card theft and other life irritations…services that would have cost us thousands of dollars otherwise for qualified legal services licensed in at least 4 different jurisdictions.
As for the FTC action…that’s a tempest in a tea pot initiated by an ignorant FTC staffer. FTC is seeking a refund of all money earned by PPLSI in the ‘sale’ of a product referred to as “ADRS.” ADRS is a free service provided to small businesses to help them understand the provisions of the FACT Act ‘red flag’ program requiring companies to protect personal information and to report fraud attempts. Because it’s a free service, there are no revenues to refund and the FTC can’t understand that. That’s why they have asked for more information under the threat of legal action.
While PPLSI has only been in business in the US for 37+ years, the pre-paid legal concept has been widely accepted and used in Europe for more than a 100 years. It is, for the US, a new, but persistent paradigm for the delivery of legal services that will not go away. It is the same concept of pooled resources paying for what would otherwise be expensive procedures as medical, home, and auto repair insurance. In fact, many states require PPLSI associates to be licensed and the licensing authority is normally the state insurance board. Do you put your nose in the air and sniff at people who have medical insurance? Do you laugh at people who have auto insurance? What’s the problem with legal services insurance?
At 67, I’ve done a lot of business work and talked to a lot of attorneys. With the complexity of laws, I recognize that I tackle legal issues on my own at great peril and that lawyers are necessary. At the same time, I’ve come to realize that not all law is rocket science requiring the most expensive professional available. I don’t need to pay $1000/hour for a simple incorporation or LLC…or even $250/hour. A lot of legal work is K-Mart work, why pay Lord and Taylor prices?
What people object to is that pricing in the legal arena seems to be what the market will bear, not what’s directly rational and relevant to the issues at hand and those kinds of rates seem to serve an ego-driven market.
Can you afford you? What percentage of the middle class wage earners can afford you? For how long? Will you return all of their calls within 8 hours?
And…this little essay doesn’t begin to get into other services provided by PPL, such as virtually unlimited motor vehicle accident support (even those including vehicular homicide), and IRS legal representation, and not to mention the various family coverage (including minor children) for identity theft monitoring and theft-related credit restoration services.
In brief, the type of pre-paid legal services you laugh at are representative of programs provided by other PPL companies that don’t use the provider law firm service concept PPLSI has developed. The FTC action is a knee-jerk work driven by junior FTC staffers ignorant of the facts. There are better ways to market your firm effectively than demeaning a legitimate company.
Dan,
Thanks for your input.
To clarify a few things…
Self-serving? The target demographic for my law practice isn’t the same as Pre-Paid Legal Services. I’m not knocking the competition because PPL is not my competition. We focus on different areas of law and types of clients.
As for the comments re: the FTC, we’ll disagree. This wasn’t just a “junior staffer” running rogue. And what about the SEC? A “junior staffer” issue there too? Hardly.
What some local yokel did in Ada, Oklahoma is irrelevant to this issue other than perhaps as anecdotal evidence. Not knocking Ada…my mentor (now retired) is from there.
Yes. It does come down to price, speed, and quality. PPL is discount price driven. It doesn’t market itself as being the best legal representation. Nor should it. Just like McDonalds doesn’t pretend to be Morton’s Steakhouse.
If you’re happy with PPL, by all means keep using the company’s services. PPL attracts bargain hunters or those who can’t afford to pay for the best.
But let’s not pretend that PPL delivers price, speed, and quality. Perhaps 2 of 3…but not all.
Best wishes,
-Mike
You know.. I had to comment.
Just feel compelled to say something – Dan, my friend, it’s pretty
obvious you also have a bias here of some sort, though not named. Your spewing of information
regarding the suit in detail tells me that, likely, you are a PPL rep. No problem… so was I as one
point, for several years actually.
I even had the cause to TRY and use their services on two occasions – uhm, sorry – it was a joke,
but I was not laughing. In the end, it cost me more headache AND money to fight, and lose, my
only speeding ticket in my life out of state, coming back from holding my own Mother in my arms
while she died of a brain tumor… having not slept in over three days, blah, blah, blah.
No one wants to hear my story over a speeding ticket, but it was so frustrating trying to get ANYONE
to talk to me in PPL and once I did, to get anyone who knew what they were doing, so don’t spout
the virtues of the service for everyone who uses it, if you were fortunate enough to have a good experience,
cudo’s – I was not. In fact, that was why I left the organization.
Look, I’m not saying they are a bad business either, but the point about “You get what you pay for… and
sometimes not even that much” really was my personal experience with PPL. So… speak for yourself
maybe, but I felt pretty burned after paying my fees every month for two years just to find out a ticket still
cost me $500!
Anyway… I also agree that lawyers in general are not the most approachable or ethical folks… (sorry Mike!)
I mean, that is why an entire humor industry is fueled by lawyer jokes I imagine, right? ;o) Of course, if you
ever need one… they can be your best allies too. Heavens forbid you ever need one or have to do the search
to find the right one.
My experience has been that it isn’t who’s right or even WHAT is right, that wins in law… it’s who has the
best lawyer to find the most greased loopholes that the other lawyers simply cannot grasp well enough to pull back against, who prevail. Right and wrong have little to do with it most of the time, so my LAWYER friends
say now anyway.
I LOVE the idea of a “loser pays” system… and maybe even a system where losing attorneys don’t get paid
at all. That might stop the mess of a litigious society dead in it’s tracks.
I’m also an idealist.. and would love to see courts where the law was really the rule and where justice,
not the legal system itself, was truly served. But, that is another conversation, isn’t it?
PPL is what it is… an alternative; with pro’s and con’s just like anything else. And yes, it is the low cost leader,
less expensive, and in my EXPERIENCE, not necessarily the best service or most advantageous
representation, alternative. Sorry if that is not what you like to hear – but that, my friend, is from the
personal archives of a true user and past rep himself.
I’d like to say more.. like how I think the whole FTC thing is also unfortunate… when has government
oversight of ANYTHING been good for Americans as a whole. I advocate that eveyone be legally obligated to
actually READ the Constitution and Bill of Rights at least ONE TIME in their adult life before saying anything on the subject too… I’m no paragon of perfect virtue, to be sure, in my experience no one is… and I am all for idiots,
shysters, liars, crooks, scammers, etc. being run out of town… but to start down this path will, in my opinion,
open doors that will potentially establish precedents that, like the Patriot Act, we all may one day regret that
we did not look carefully enough at before letting the government take on roles it was never meant to do
because we have gotten too lazy or ignorant to handle ourselves.
Just chiming in…