Can Pre-Paid Legal Services Help Freelancers?
Credit: Andy Dean Photography on Photodune
As freelancers, the thought of trying to tackle a legal problem can be scary: whether you’re just trying to collect on an unpaid invoice or you’re facing a much bigger problem, the fact that we don’t have lawyers at our backs can make things more intimidating.
But just because you aren’t in a position to plunk down a few hundred dollars on a lawyer’s desk doesn’t mean that you are absolutely out of options. There are organizations that offer other alternatives, such as pre-paid legal services.
The mechanics of the opportunity are not so different from an insurance plan: you choose a plan and pay a monthly fee. Then, when you need legal help, you go to a lawyer and your plan pays the costs.
There are limits, of course, but the prices for most plans are much more affordable than an hour’s time with an attorney would be otherwise.
The Benefits for a Freelancer
Joe D’Eramo is a freelance copywriter and has used Pre-Paid Legal for several years, specifically for help with collections and copyright. D’Eramo explains his motivations for choosing Pre-Paid Legal’s services:
I purchased the Pre-paid Legal Plan…because it made sense. I have a very good friend who’s an attorney who offers his advice at no cost and will work for family discount. But I hate to impose on our friendship. He’s also a busy guy. Pre-Paid Legal gave me an option where I could get my legal questions answered in a timely fashion at a more than reasonable price without my own guilt.
He’s found the service helpful more than once:
The two areas where I have had to ask questions are copyright and collections. Generally, I’ve gotten enough advice where I felt comfortable enough without hiring an attorney. For the collections part, I hadn’t been able to collect from somebody and needed the money. To have a lawyer who will draft a letter on your behalf creates a kind of karma. I never ended up sending the letter and had payment that week.
With a pre-paid legal company, you do work through legal advisers that the company chooses. When D’Eramo has needed help, he calls a line the company maintains and leaves information about the legal problem he’s facing. Someone calls back within a day and he says, “I’ve felt comfortable acting on the advice I’ve received, particularly where I had concerns about copyright issues.”
In fact, D’Eramo recommends other freelancers explore the options that using a pre-paid legal service provides:
At some point, if it hasn’t happened already, somebody is going to be unhappy or attribute liability for your services and seek damages. It’s best to have a legal response in place. Even if the service doesn’t cover it, they can point you in the right direction. I also recommend it if you have any difficulty collecting from clients. A nice letter on a law firm’s letterhead typically gets a response from people who are slow to pay.
There aren’t a lot of different companies offering pre-paid legal services; the main one is Pre-Paid Legal, the company D’Eramo uses. But you may be able to find local lawyers in your area who will let you work out a similar deal or barter services if you so choose.
A Few Concerns About Pre-paid Legal
If you run the phrase ‘Pre-paid Legal’ through a search engine, you may notice that the company operating under that name has had a few legal problems of their own. Pre-Paid Legal’s sales system does operate as a multi-level marketing arrangement, which can make many people uncomfortable. It’s worth noting that the organization’s issues stem from marketing practices specifically and not legal advice.
Photo credit: Some rights reserved by Andy Dean Photography.
I have Pre-Paid Legal and I have used it for my design service before. You figure they will revise and contract or document up to 10 pages at no additional cost is a steal. I do advise purchasing it. Plus this company has been around for 38+ years!
I have used Pre-Paid Legal for almost a year and their services have been invaluable. Most of my interactions with them are the same as Brandon’s – reviewing various contracts and agreements for my web design/training business and for my rental properties. A friend highly recommended Pre-Paid Legal services to me after they saved him thousands of dollars.
Great insight! Legal fees add up fast and are very expensive.
This is really interesting; I’d never head of such a thing. Some questions though (for Thursday if she’s here or Joe or whomever):
What does “a multi-level marketing arrangement” mean in this context? How does that work and why is this a problem?
Checked out the site and see that they have a variety small business plans plus self-employed and home-based add-ons. I understand these offerings vary by state, but I’d love to hear what arrangements people have tried out and what their experiences are.
Thanks, in advance.
After watching a very dear friend lose thousands of dollars on this, that, and the other multi-level marketing scheme, I avoid this type of business like the plague.
So, what do I suggest?
If cost of consulting with an attorney is a concern, see if there’s a free legal clinic in your area. I’m writing this from Tucson, Arizona, which is home to the University of Arizona. The UA has a law school, and guess what, the law students have clinics.
Or, if you’re going to have to see a “real” lawyer, you don’t have to spend a fortune. Case in point: I recently consulted with a local attorney on getting out of a contract that I shouldn’t have gotten into in the first place.
Total cost? Fifty bucks for a half hour of his time. Better yet, in our half hour together, he gave me more good information than I get from some people in an entire day.
I’ve had PPL for over 6 months and have found it to be very useful. I have used it to create a will, send letters to my HOA and review several documents. The best part is that I can call an attorney any time I have a question and talk as much as I want without wondering about the costs.
FYI, you do not have to be part of the multi-level marketing to own the product – just as you don’t have to sell avon to use their product.
If anyone has any questions about it, I would be happy to give you more info.
I am an associate with Pre-Paid Legal Services and I just wanted to add to the discussion. My son is a freelance graphic artist and was brought up using PPL services. When he went out on his own he bought a PPL plan before he bought health insurance. Why – first he was invincible even though he rides a bike in Manhattan but second, he knew he needed to consult lawyers about contracts, leases and roommates (to name a few of his issues).
I was a free lance documentary filmmaker and sound engineer and I would have loved to have had a PPL plan when people took advantage of me. I lost my film to a partner, was stiffed for payments, etc This would have been very helpful.
Finally, the fact that it is sold through a marketing model of network marketing in no way impacts our clients or the quality of the service. In fact, the vast majority of our plans are sold through our direct marketing arm which looks a lot like the way any insurance product is sold. A client would have no way of knowing if their sales associate was connected and working in the network marketing part of our company or the direct sales part; it has no affect on the client. I hope that the challenges that people may have had in the past with network marketing will not color their attitude toward this very fine company with its much needed service. If you had a bad meal in one restaurant would you never eat in another restaurant? Or buy food that was prepared in a restaurant?
By the way there is no long term contact so you can try the service for a month and cancel your plan if you are unhappy. We have to be good to keep our clients and our clients are like many of the people who have commented – they are happy!
Prepaid legal isn’t actually worth the cost in the long run. Do the simple math.
Even Dave Ramsey has railed against it. (http://www.gosanangelo.com/news/2009/oct/31/prepaid-legal-not-worth-it/)
To quote Ramsey:
“Prepaid legal will cost you about $300 a year. If you take $300 a year, and multiply that out over 10 years, you’re looking at $3,000. The truth is that the average American consumer doesn’t spend $3,000 on legal bills in this amount of time.”
Since we’re all freelancers here, the better solution to your legal needs is not some slimy MLM. But to use your networking ability and your talents to develop a business relationship with someone who is a lawyer or a paralegal or CPA who can advise you on business legality issues. Find a way you can help them and then help them.
When ever something is tied to Multi-level marketing, that’s your clue it’s promises are a fairy tale and to take a hike.
The very mention of Prepaid legal has pretty much caused my respect of this site and Envato to drop.