Legal Advice: Pay First, Then Ask
Here’s an interesting tip for cost-conscious business owners who are understandably wary of the expenses of hiring an attorney: Hand over the money first. Talk later.Lest you think I’ve been sniffing ether, what I’m referring to is the growing concept of prepaid legal services. For many entrepreneurs, prepaid legal arrangements can be a boon to your business, provided you’re aware of certain wrinkles and limitations.
For those unfamiliar with the idea, prepaid legal is pretty much what the term implies. Rather than hooking up with an attorney and hearing that dreaded clock tick off the hourly charges, prepaid legal usually mandates a relatively modest monthly fee — anywhere from $20 to $100 and beyond, not counting initial setup charges.
In return, your monthly dues buy you access to an attorney when you need one. Depending on the particular plan, that may encompass an initial consultation, access to legal correspondence or elementary functions such as preparing a will.
On one level, prepaid legal strikes at a central fear for many small-business owners that legal advice and guidance are simply out of reach financially. Gerry Goldsholle, founder of the legal Website www.FreeAdvice.Com, says: “It enables you to speak with an attorney without having to worry about the clock ticking. It’s a low-cost form of legal diagnosis.”
From there, says Goldsholle, many prepaid services can address a variety of legal issues within the confines of a plan’s basic services. That, he adds, may be sufficient for any number of small-business owners: “Most people need a simple answer to a relatively simple question. For them, these plans can be extraordinarily helpful.”
Additionally, should a legal need go beyond a plan’s core services, participants also may be able to access additional guidance at reduced rates. “If it’s complicated, chances are good you’re going to have to pay more for it,” says Goldsholle. “But you’ll likely receive it at a reduced fee.”
However attractive prepaid services may seem at first glance, it’s not necessarily a legal panacea. It’s critical to bear some additional concerns in mind:
Know your legal needs. The first step in evaluating prepaid legal services is a review of what you expect you’ll need from an attorney. If you don’t anticipate extensive, comprehensive legal advice, then prepaid may be more than adequate. But, if you’ve required services that go well beyond the basics, you may do better by establishing an ongoing relationship with an attorney outside the purview of a prepaid plan. “A plan isn’t going to serve someone who keeps calling every 20 minutes with involved questions,” says Goldsholle.
Check a plan’s services. Knowing the kind of legal services you’ll likely need naturally segues to the workings of the plans themselves. Investigate plans carefully to see what they cover as part of basic services and the types of services that cost you more. Not surprisingly, program services will differ.
Be aware of continuity. Another consideration is continuity of service. Some plans will automatically refer you to the same attorney every time you contact them; others will put you on to whatever attorney is available at the time. If working with the same lawyer every time is important to you, check to make certain that your plan offers that sort of consistency.
Know a plan’s logistics. It’s critical to know how a plan actually functions. Depending on the plan and the coverage area, some prepaid services only provide advice via the phone. Additionally, look into how many lawyers are available in a particular state — if every attorney is located far from your work at home business or there are only a few from which to choose, that can make face-to-face consultation a real headache: “If a lawyer’s in Portland and you’re three hours away in Bar Harbor, you might not ever be able to meet with the lawyer,” says Goldsholle, referring to two cities in my home state of Maine. “Also, some plans offer telephone service and nothing else, while others will do follow-up work.”
Does it get personal? Many entrepreneurs also may be looking for an attorney to handle more personal issues, such as drafting a will, speeding tickets and other matters totally removed from their business. If you’re an entrepreneur, see if the plan geared to your business also provides personal services.
Do your due diligence. No matter which plan interests you, it’s always a good idea to find out as much as you can about the attorneys with whom you may be working. Ask about their credentials, including where they received their degrees and their particular specialties.
Consider a hybrid of services. Deciding whether to use prepaid legal services need not be a simple either/or choice. One alternative is to sign up with a prepaid service but also use a conventional attorney when the need arises. That provides basic services at a modest cost while offering a suitable option for more complicated matters. “If you have an attorney who charges $250 an hour, you can use the plan for all the basic questions you may have and save the others for your attorney,” notes Goldsholle. “That can be a very smart, cost-effective way for a small business to use a plan.”