Understanding Legal Services through Your Employer
Legal services provided by your employer refer to legal support, often discounted or complimentary, that is available to employees within the scope of their job or career growth within the confines of the corporate structure. These services are often used in the development of business contracts, employment contracts, non-compete agreements, non-solicitation agreements, company selected trial or litigation advice and assistance, and a host of other benefits an employer may offer its employee.
A key concept of employer-paid or sanctioned legal services is the location of the services contemplated. If you bring an action, engage in a litigation process, or take some other legal step, oftentimes the employer will supply litigators, transactional lawyers or other attorneys who will happily take on your case, at no cost to you, since they are employed by your company . All of the fees associated with the matter are paid by the company.
Why is this important? First, the initial consult will likely be completely free. Second, the firm will take you on as a client, and will work on your matter. This includes (but is not limited to) drafting, research, meetings and legal strategy. There is also sometimes no limit to the billable hours (or the cost) for employer-sponsored legal services.
Remember the portions of your contract with the company that deal with such legal services? Understand that it is possible that you will not have the full authority to decide what comes of your legal matters; instead, the company will likely have the final say if there are contractual issues that dictate what the company will or won’t handle.
Advantages of Legal Services through Your Employer
Your employer is able to secure a high quality attorney that can provide routine work such as wills and powers of attorney, real estate transfer, simple divorces, collections, etc. for a fraction of what you would pay on the market. The employee adds value to his/her personal and professional life through the discounted legal services as well as the peace and comfort that he/she is receiving quality legal assistance. It is important to note that the services are not "Free"; there is an annual fee that you will pay through payroll deductions and you will pay the lawyer directly for any work done. When considered over the course of a year, the amount paid by S/H will be considerably less than the typical hourly rate charged by the office that performs the work.
Legal Matters Covered
In addition to such traditional topics as estate planning, family law and financial advice, employees can consult attorneys on a wide range of legal issues, including:
Estate Planning
This encompasses advice on a variety of topics such as wills, trusts and powers of attorney. Many employers recommend plans that offer discounted will preparation services, with the fee generally significantly reduced compared to what an employee might pay if he or she went to an attorney not associated with the plan. Employers may also offer discounted estate planning seminars that are open to employees and their spouses.
Financial Advice
Contacting a lawyer for estate planning assistance may motivate employees to get their financial affairs in order and to develop a strategy for retirement and wealth transfer. Such advice also typically covers financing options, bankruptcy information and foreclosure assistance.
Family Law
Employees can get information about child custody, support, separation agreements, divorce, spousal support and other family law issues that can understandably be very emotional and distressing, especially for newly separated or divorced employees and their spouses. Family law attorneys can help answer questions related to these matters so that employees are better informed when assessing their options.
Business Law
Monetarily challenged employees may wish to start their own companies, whether to supplement their income or because they wish to become self-employed. Advice in this area may include business succession planning and guidance on the formation of corporations, limited liability companies and partnerships. The employer sponsored plan may also offer consultations on breach of contract issues, organization plans and antitrust matters.
Real Estate
A variety of real estate questions can be addressed with an attorney through the employer sponsored plan, including those related to real estate sales and purchases, foreclosure proceedings and landlord-tenant disputes.
Immigration Law
Employees may have questions related to immigration law, asylum and refugee process, visas and green cards.
How to Seek Legal Counsel while at Work
In order to access legal services offered by an employer, an employee must first determine what type of legal service is being provided. An employer may provide the full range of legal services offered by its outside law firm, or could be limited to only those services in a specific area of law such as immigration or real estate. Some employers provide the services through plans that will cover the legal fees, while others provide an advisor or panel of attorneys who can offer services at a discounted rate.
An employee should make sure they have the details of their employer’s legal services by contacting the Human Resources office. They should obtain information about services offered under the plan or services accessible, such as consultations with a panel of attorneys. Once the employee has the information, they can determine whether their legal issue will be covered or not and how they can proceed to utilize the services as outlined.
In most cases, the employee will need to enroll in the legal services offered by their employer. The enrollment process could include making a payment, agreeing to terms of use, and signing a client agreement. In some cases, the legal services could be offered on a complimentary basis to employees, but the terminology used in the client agreement could still be used to outline what services are being offered. After enrolling, the employee will be sent details on the plan and how to access the services being offered. For example, there could be discounts being offered, free consultations, or on a multi-casualty or hourly fee basis. After this information has been provided, employees can use the services offered by the employer at will.
Employees who reach out to the firm about the services should have their employment ID number and case number, if applicable. If the employee is not provided information on the employer’s website about the services or was unable to get in touch with the contact person for the legal services, then they should wait for a follow up letter, email or call from the Human Resources office or the attorney representative from the employer that offers the legal services. The importance of legal services offered by an employer cannot be understated. It serves to create a more holistic approach to benefits for employees.
Limitations and Considerations
There are limitations that come with these offerings, and it’s essential to review the terms and conditions of the policy in detail before relying on them. Some employer-sponsored legal services may only offer assistance for specific types of matters, or have a limit on the amount of coverage provided by a plan. Be mindful that an employer-sponsored plan may not cover representation for an employee’s spouse or other family members, even if those family members are also covered under their employer’s benefits plan. Failure to assess the various terms may lead to a nasty surprise when an employee’s legal issue arises, with an overlap of coverage between two policies, or no coverage at all.
Certain employer-sponsored plans could also place restrictions on the number of services offered, with specific exclusions for litigation, or corporate matters. For instance, an employer-sponsored plan may pay for the drafting of a will, or the review of mortgage documents, but require employees to pay for a lengthy consultation required for a divorce proceeding, or the filing of court documents. An employer-sponsored plan may also be subject to a deductible, or require payment of a co-payment, and in some cases these fees could escalate quickly, particularly in the case of family law matters. Consultation services offered for free or at reduced rates may also only cover limited time periods. It’s crucial for employees to review the details of the policy in order to assess whether it meets their potential needs, and what costs may arise should they utilize the company’s plan .
No matter the case, there are additional considerations to be taken into account. For example, if a firm receiving legal services has an existing agreement with a law firm, acceptance of an individual’s case may lead to a conflict of interest. In addition, certain employers offering free or reduced-cost legal services, such as some insurance companies, may have attorneys with an economic interest in limiting the scope of an employee’s legal issue. For example, if an employee gets an impaired driving charge after a work party, the insurance company may wish to result in a plea bargain, or a guilty verdict, in order to limit its liability from any potential damages arising from their employee’s conduct. With family law or employment law issues, a conflict may arise with a prospective firm based on the interests of the company or the firm’s clients, particularly if the employee wishes to pursue a course of action that may run counter to the employer’s interests.
In light of these issues, it is advisable for employees, and individuals in general, to seek independent, professional guidance when incorporating legal advice or representation into their decision making process. Although employer-sponsored plans can be a benefit to particular groups of employees, they do not replace the need for individuals to understand their rights and responsibilities, nor the value of having a relationship with a trusted legal professional.
How Employer Legal Plans Compare to Purchasing Legal Services Directly
Examining the Cost-Benefit of Employer-Provided Legal Services vs. Independent Counsel
When your employer provides or subsidizes legal services, it may represent a significant financial risk-reduction strategy. Nearly all employers have to assess the cost-benefit of providing a suite of benefits or services to employees and employer-provided legal services are no different. Many employers that provide some level of legal assistance do so through an employer-provided insurance product known as pre-paid legal, or group legal plans. These programs are not insurance, but are instead a system established through contract between the plan and the employee (or his/her family members) and the employer. The plan allows the appointment of an attorney to handle specific basic services, such as a Will or an uncontested divorce, in exchange for a modest fee. Plans can be complex and involve a complicated benefit schedule.
Employer-provided legal services may also be offered through a Flexible Spending Account plan (FSA), a Health and Wellness plan, or as part of an Employee Assistance Plan (EAP). Group legal plans and Flexible Spending Accounts allow employees to pay legal fees with pre-tax dollars. An EAP will solely provide an initial consultation with an attorney. EAPs are generally free, as they are funded solely by the employer. Most benefits offered through FSAs and EAPs are off-set by employee contributions; however, it may also be a benefit of employment. The downside to these programs is that providers may opt in/out of participating in EAP programs, as there is no guarantee of payment by the employer (especially in an FSA plan).
In either case, a comparison between the costs of the above described options and consulting an attorney directly will allow for a clear view of whether or not the employer-provided services are worth it. By way of example, an uncontested divorce may cost a flat rate of $500 through a group legal service provider. This type of matter can be quoted by attorneys in private practice and the rates can vary widely. A typical rate for an uncontested divorce with at least 30 days of notice is between $200 and $300 per hour. So, if the process is expected to take an average of four hours, the cost of the uncontested divorce would be $1200-$1400. In this example, the "savings" of employer-provided legal services is apparent.
Conversely, if the plan provided by your employer has caps and exclusions, the true value of those services may be hard to quantify. If your employer has negotiated a group rate with the provider, the market value of the services included in the plan may fall below the retail value of those services. As an example, if an employer has negotiated a group rate of $500 for an uncontested divorce, the "savings" when compared against the average rate of $300 per hour for an uncontested divorce in New York City typically will be minimal (if not non-existent). In New York City, where an uncontested divorce takes an average of 4 hours, the cost of an uncontested divorce may be $1200-$1400 after 30 days’ notice. Getting divorced in New York State on your own is complicated. Considerations that go beyond the basic asset allocation model in a contested divorce (to which an employer-provided plan typically applies) are many. Those considerations are too often neglected in employer-provided plans.
Comparing the cost value of employer-provided services with direct services provided by providers is only one piece to this hyper-complex puzzle. Although many employer plans offer extremely valuable, easily quantifiable benefits, those benefits are the tip of the iceberg. The circumstances under which the insured/employees may access those benefits are hardly ever emphasized. As noted above, the average uncontested divorce may take four hours or a little less. What if your particular divorce requires six months of work? What if you want to keep the matter out of court and have the ability to negotiate your settlement? However, the group legal provider appointed to handle your case only works 9:00-5:00, Monday-Friday in between his/her several dozen cases. The majority of the work, then, is performed by a paralegal or new associate that is billing at the same rate of your insurance-paid ‘lawyer’. How much additional time and money does this require you? Probably more than if you just paid for an attorney. If an employer-provided service limits an employee’s access to immediate, high-quality representation, the value of that benefit is too often lost.
Using Employer Legal Services: Success Stories
While the benefits offered by legal service plans can seem a bit abstract before you use them, they become real with real-world success stories. One program manager shared the following examples: Maria needed assistance with obtaining guardianship for her 18-year-old daughter, Alyssa, who had to appear in Superior Court for her own hearing to be emancipated. Maria used Employer Legal Services to prepare guardianship documents for petitioning the Court and guardianship and acceptance of guardianship forms to take to the hearing, along with instructions on how to complete each step of the guardianship process. A month later, Maria emailed Employer Legal Services to let the staff know that she and Alyssa had been granted guardianship and to express her gratitude: "I wanted to take the opportunity to thank you and your staff for all your help in our time of need. I’m acting as my daughter’s legal guardian now and the process was so easy because of all the documents you helped me prepare. I don’t want anyone else to have to suffer through an unstable period in their life, like I did, without knowledge of the good legal services offered through my employer. Thank you again!" John used Employer Legal Services following his wife’s unexpected loss at an early age. He recently wrote the following to the benefit manager at his company: "I thought I would drop you a line to thank you and all of your team for a great service. I lost my wife of 36 years on April 18 last year and I have been trying to get over the shock of her sudden passing. We had been married since 1976 , and starting back in 1972 with my first job, I’ve been at the same company for 42 years. Long story short, we had planned out our lives but unfortunately, it didn’t work out the way we had hoped. I’ve been working with [Lawyer X] and she has been great, obviously adapting my needs as they arise. It is a great feeling to know that she is just a phone call away. My employer has Combined Legal, which I understand is part of [the program offered by Employee Legal Service plan for my employer]. I’ve always brushed it off, thinking "I don’t need that." Writing this tonight, I realized that I should have used this service a long time ago, apprehensive or not. Not having a will or powers of attorney before the death of my spouse, it was terribly uncomfortable for all involved. In addition, I also recently was scammed out of money in a transaction on eBay. I was shocked at what happened, but lucky enough not to get too hurt. ([Lawyer Y] is doing a great job in that matter.) I’m sure there are many more meant to be horror stories that are given to lawyers, but in speaking with [Lawyer X], she is a true professional and I’m glad to have her in my corner. Again, thank you and [Lawyer Y] for being a part of my family and helping us through these trying times."