Group Legal Services

Group Legal Services

Legal services provided under a plan to members, who may be employees of the same company, members of the same organization, or individual consumers.

Group legal services resembles group Health Insurance. It is an all-purpose, general coverage: for an annual fee, members are entitled to low-cost or free consultation with an attorney. Several forms of group legal services exist, ranging from employee-provided benefits to commercially marketed plans. These vary in scope, price, and availability. The first plans appeared in the early 1970s, for unions, which negotiated for them as employee benefits and have remained their primary users. Over the following two decades, the concept expanded as lawyers saw an opportunity for a nontraditional way to market their services. By the mid-1980s, the rise of commercial plans aimed at other groups sparked considerable interest in the legal profession, the media, and the public. Approximately 10 percent of U.S. citizens belonged to some form of plan in the 1990s, and observers expected that percentage to increase as more vendors entered the market to cater to consumers.

For several decades, the legal profession resisted the plans and sought to restrict them. State bars opposed them because the organization of the plans requires the imposition of an intermediary between the attorney and the client, which they saw as violative of the traditional attorney-client relationship. As the first groups to realize the advantages of using the plans, unions encountered stiff opposition in several states. Beginning in the early 1960s, however, the Civil Rights Movement and a series of U.S. Supreme Court decisions removed these barriers.

The Court's decision in NAACP v. Button, 371 U.S. 415, 83 S. Ct. 328, 9 L. Ed. 2d 405 (1963), struck down a Virginia law that had prevented the National Association for the Advancement of Colored People (NAACP) from providing staff lawyer services to members. Brotherhood of Railroad Trainmen v. Virginia ex rel. Virginia State Bar, 377 U.S. 1, 84 S. Ct. 1113, 12 L. Ed. 2d 89 (1964), struck down an Injunction that prohibited legal services activities of the union on First and Fourteenth Amendment grounds. In United Mine Workers District 12 v. Illinois State Bar Ass'n, 389 U.S. 217, 88 S. Ct. 353, 19 L. Ed. 2d 426 (1967), the Court permitted the union to collectively sponsor legal services for members' Workers' Compensation claims, holding that restrictions imposed by the Illinois State Bar Association were unconstitutional under the First Amendment.In response, the legal profession slowly loosened restrictions in its Model Code of Professional Responsibility and Model Rules of Professional Conduct. By the mid-1970s, most of the special restrictions were gone.

These trends cleared the way for a broad expansion of group legal services. The chief benefit of such plans is discounted legal fees. Legal advice is often expensive. As in group health insurance, volume produces savings: the buying power of a large membership can lower the costs to individuals. This feature figured prominently in an expansion of the plans into commercial markets in the 1980s. Moreover, although individuals with low incomes are sometimes entitled to legal aid, and affluent individuals can usually afford a lawyer, members of the middle class are often hit hard by legal bills. Thus, marketers of group legal services have tried to appeal to middle-class consumers through such outlets as banks and credit card companies.

Federal and state regulations govern plans for group legal services. Employer-provided plans fall under the Employee Retirement Income Security Act (ERISA) (29 U.S.C.A. § 1001 et seq.). Enacted in 1974, ERISA protects employees' Pension rights and imposes strict fiduciary requirements on their group legal services. Other types of plans are subject to state laws, which generally impose light regulation and follow the legal profession's Model Rules of Professional Conduct in such areas as ethics and Attorney-Client Privilege.

Further readings

Costich, Julia Field. 1993–94."Joint State-Federal Regulation of Lawyers: The Case of Group Legal Services under ERISA." Kentucky Law Journal (winter).

Schwartz, Alec M. 1989. "Lawyer's Guide to Prepaid Legal Services." Legal Economics (July/August).

References in periodicals archive ?
DES MOINES, Iowa, May 4, 2015 /PRNewswire/ -- ARAG, a leading provider of legal insurance, announced today that ARAG Corporate Counsel Nicolle Schippers was elected president of the Group Legal Services Association (GLSA).
Tenders are invited for Voluntary Group Legal Services.
The liberalization of rules surrounding group legal services were
As examples, he said for many years, it was unethical to engage in group legal services or for lawyers to advertise.
PPLSI announced last month that it would test group legal services plans for small businesses in California and Pennsylvania under an agreement with the Staples chain of office supply retail stores.
Or you might consider giving your employees greater freedom to tailor their benefit packages to suit their own interests by offering a variety of special-interest benefit plans, such as group legal services, personal financial planning services, and long-term care insurance.
However, a tax credit for employer-provided group legal services was dropped.
A significant number of companies surveyed now offer -- or are planning to add -- the following products in the next 18 months: optional term life insurance (40%), long-term care insurance (37%), critical illness insurance (21%), travel accident insurance (19%), auto insurance (15%), group legal services (14%) and homeowners insurance (11%).
He has also served as AerCap's Chief Legal Officer since 2005 and as the head of the Group Legal Services department since 2004.
Supports federal legislation to amend [section]120 of the Internal Revenue Code to restore, increase, and make permanent the exclusion from an employee's gross income of employer contributions to group legal services plans.
Such qualified benefits include accident or health plans, disability benefits, accidental death and dismemberment benefits, the first $50,000 of group term life insurance, a group dependent care assistance plan, and a group legal services plan.
An employee may, under Code Section 120, exclude from gross income amounts contributed on behalf of the employee, spouse and dependents toward premiums on a group legal services plan as well as the value of legal services provided by the plan or amounts paid for legal services.

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