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					                                                                                                                                    How Two Legal-Service Pians compare

  Business Dav                                                                                                                       Costi About $16 a month
                                                                                                                                     Subscdbers: More than
                                                                                                                                     Features of covemge:
                                                                                                                                                                                                       Costi 56.75 8 month
                                                                                                                                                                                                       Subscribws: Abou? 200 000
                                                                                                                                                                                                       Feattures ot coverage:
                                                                                                                                                                                                       l ~~E%IC?I new legat matter, a one-hour in-
                                                                                                                                     W For eatzh new legal matter. a ha&hour
                                                                                                                                     consuhatmn wtth lawyer of subScriber choti         10             person consuRaBon wrth a lawyer assigned by the
                                                                                                                                     dmcuss a WIII or other legal matte?. (Clu9nt 1s                   PM.
                                                                                                                                     re~mtiursed for 100 percent of th8 t8wyer.8                       I Wtfimitec! t&phone or mail consuR8tlons with
                                                                                                                                     customary f8e.j                                                   that l8wyer.
                                                                                                                                     l For defendmg fawsut% CoWit of UP @ S5300                        l Review of legal documen% up to SIX p8ges In
                                                                                                                                     the ftrst year. &reaslq $5.000 8 mr to 8 ,                ’       length <
                                                                                                                                c    maxtmum of SZ5#OII the iifth jre8r:                               m PrepaGihon of a 55rnpte witi
                                                                                                                                     l For &fenUmg tax matters, up~%OCXl for                           l LetiefS or telephone calls by the lawyer on the                                 Nancie E. Pouios, general man-
                                                                                                                                     attorneyof accountant.                                                                    e
                                                                                                                                                                                                       client’s behalf. as may b necessary to resolve a
                                                                                                                                                                                                                                                                                         ager of Momgomeq Ward’s di-
                                                                                                                                     l For 8u~omobiIe-reia Wd matters. *wMISOn8LJie’                   matter.
                                                                                                                                                                                                                                                                                         rect-mail prepaid legal setice.
                                                                                                                                     tees rangng tram $250 m con- with 108tng a                        l Reduced rates on uncontested divorces, real
                                                                                                                                     drover s hcense, to .$2O.OOOOr more &I Connection                 estate clos~rtgs and other matters. with a $50-an-                                legal-servtces chents, s u c h chents
                                                                                                                                     w!th a fatal automobile accKle&                                   hour celting on t88s.                                                             can be a boon to small general prac-
                                                                                                                                                                                                                                                                                         tices. In Los Angeles, jor exahple,
                                                                                                                                                                                                                                                                                         the four lawvers at Fazio i? Fairchild
                                                                                                                                                                                Group, Montgomery Ward’s fmanclal                     But skeptics point out that advIce is              d o l i t t l e bit w o r k f o r theu MO0
                                                                                                                               m on how and when people should
                                                                                                                                                                                servtces subsldjary, sends he four                  only as good as the lawyer glvlng it.                Amway clients, 2,000 M o n t g o m e r y
                                                                                                                               use lawyers.”
                                                                                                                                                                                 millton pieces of mall every three                 “It’s not a good vatue, even at a rew                W a r d c l i e n t s a n d o t h e r prepad
                                                                                                                                 Prepaid Legal Services inc., a pub-
                                                                                                                                                                                 months to the store’s credtt-card                  dollars a month, If you’re aSSIgned to               clients. Christopher Fairchild s a i d
                                                                                                                               hciy traded company based in Ada,                                                                                                                         the offIce handles about 100 telephone
                                                                                                                              Okla., is the oldest and biggest of the           holders, and according to Nancie E.                 a lawyer who has no expertise m the
                                                                                                                                                                                Poulos, the general manager of the                  area you’re concerned with and no m-                 calls a day, whtch m turn g e n e r a t e
                                                                                                                              compames selling to mdividuais -
                                                                                                                                                                                plan. about 1 percent sign up. Mail-                cenlive to spend the time lo research                about 25 wills, 20 or 30 letters on legal
                                                                                                                              8nd one of the few that allowsmem-                                                                                                                         matters and 10 documents toreview.
                                                                                                                              be= to use any lawyer they want.                  mgs will be natIonwIde by September,                11,” said a partner at a large New
                                                                                                                                                                                she said.                                           York law firm, who asked not to be                     According to Warren Feldman, 8
                                                                                                                                “I think choosmg your own lawyer
                                                                                                                              is as important as choosing your own                                                                  named.                                               Long Island lawyer who dazs prepaid
                                                                                                                                                                                Founder Predicts Rapid Growth                                                                            work for NatIonwIde Legal Sewices,
                                                                                                                              doctor,” Hariand Stonecipher, the                                                                     No Easy Measure-
                                                                                                                              founder and chairman of the compa-                   Hyatt Legal Servtces’ two-month-                                                                      a pubhcly t r a d e d N e w Y o r k - b a s e d
                                                                                                                              ny, s8id. “If you’re being sued, an un-           old Lawplan IS slgnmg up about lO,OOO                 While there IS no easy way to meas-                company, and for several umon and
                                                                                                                                                                                Citibank credit-card holders a week.                ure the quality of iawyermg, most                    employer plans. the key to handlmg
Joel Hyatt, left, founder of Hyatt Legal Services, predicts Ihat Hyatt’s Lawpian will have 500,000individual sub-             known voice on the other end of the
                                                                                                                              phone may not be very reassurtng.”                according lo its founder, Joel Hyatt.               plans do try to gauge clientsalisfac-                prepaid chents IS a highly automated,
#crIbem by year end. Warren Feldman, a Long Island aUomey, does prepaid work for Nacfonwide Legal Services.                                                                     and the ru-st malimgs have gone out                 lion.                                                well-managed office.
                                                                                                                              Doubling of Sales AnUcipated                      to holders of FIrestone credit cards.                  “One of the thmgs we look at, on a                   “Clients are susptcious right from

Legal Advice: $6.75 a Month
                                                                                                                                Prepaid has about 150,000people in              By the end of the year, he predicts,                m o n t h l y basis, 1s t h e cancellation           t h e begmmng with Ihis kmd of pm
                                                                                                                              22 states selling the plan door-to-door           Lawplan will have 5OO.OOO mdlvldual                 rate of people using each iaw firm,”                 gram,” s a i d M r . F e l d m a n , w h o s e
                                                                                                                             and at gatherings of their friends and             subscribers drawn from the mailmg                   Ms. Poulos said. “We can tell pretty                 firm, Feldman & Kramer, has eight
                                                                                                                             neighbors. Prepaid’s revenues were                 lists of banks, department stores and               qutckiy where there’s a problem. The                 lawyers tn Hauppauge, L.I., and M8n-
                                                                                                                             nearly S2O milhon last year, and Mr.               oil compames.                                       No. I compiamt people have about                     hattan. “You have togive them better
                                         paid for by unions or emplovers.              But there IS no question that the      StonecIpher expects more than dou-                   The A.F.L.-C.l.0.‘~ more than 13                 lawyers, m our plan and elsewhere, 1s                service than a traditional law firm
                                            “Until about four years ago, all the     plans are quuzkly gammg momen-          ble that tfus year.                                mIllion m e m b e r s , m e a n w h i l e , a r e   t h a t t h e y d o n ’ t r e t u r n phcme c8lls.   would. And we can. If a client warns 8
          By TAMAR LEWIN
                                         actIon was m the unions, but now thp        tum. “The market IS expanding rap-         The Amway COrF@raliOn ais uses                  about to get another kmd of legal-                  Our subscribers get a toll-free num-                 WIII, our computers give him 8 range
                                         financial services cornpanics. msur-       Idly,” said William Bolger, executive    person-to-person contacts by almost                services package, known as a “free                  ber to call if there’s a problem, and                of possible clauses that’s much wider
   Montgomery Ward sells clothing,       ancc rompanirs and all kinds of other      director of the National Resource        8 milhon distributors to sellits plan.             plan” - in effect a group-buymg ar-                 the lawyers know we take complamts                   than what a lawyer going through the
bicycles, televlstons and now, for      businesses at-~ mtrrrsted.” said AIN        Center ror Consumers 0r Legal Serv-      L8st May, Amway distributors in                    rangement - under which certam                      v e r y serlousty, s o I thmk they’re                form books would find. The down side
$6.75 a month, basic legal scwrccs: a   Schwartz, cxccut~vc dlrpctor nf thr         ices, a trade group m Washington.        four states began offering packages                lawyers will offer members a 30 per-                especially careful IO be responsive to               is that any mismanagement leads to
simple will, document review, unltm-    A m e r i c a n Prcpatd Legal Servlccs ln-  “But it’s going to be a few more years   ranging from the $l6O-a-year faniily               cent discount on fees. The plan will                our subsc*rlbers.”                                   a losmg situation.”
lted telephone consultations with a     stilute, u nonprofit group conncctcd        before everyone who wants a prepaid      plan - covertng free wills, three                  cost neither the A.F.L.-Cl.0 nor INS                    Stall, when II comes to quality con-                For the participaUng lawyers, who
lawyer and a dtscount on more com-      to the Arncr~ca~~ Bar Association.          legal-servtces plan will have been of-   hours of in-person consultation,un-                                                                                                                         are paid a dollar or two 8 month for
                                                                                                                                                                                members any money. Such free plans                   t ml, the prepaid plans of l&gal &imcs
phcatcd matters such as divorces.         But several uncertamt ies surround        fered even one package, much less a      limiled telephone consultations, docu-             pose a threat to the profit-makmg or-                s u c h a s H y a t t Leeal S e r v i c e s o r     each prepaid client assigned to them
   Amway - which peddles soap,vita-     the prepaid plans. mere is the matter       chotce of plans.”                        ment review and reduced rates on                                                                        Jacoby & Meyers may have an edge                    - even if the client never c&Is -
mins and other products - recently                                                                                                                                              gamzatlons that selt p a y - m - a d v a n c e
                                        of whether they are a form of insur-           Until 1977, when the Supreme Court    other services - 10 the S5OO-a-year                plans. But those orgamzatlons say                   over plans that assign the work to                   there IS stiii some doubt about how
started offering a slmliar legal park-  ance, subject to extensive state regu- opened the way for adverttsmg by              executive plan, which covers many                                                                      outsIde tawyers, a point they make on                profItable prepatd plans will be. The
ap, calId the Ultimate Legal N~I-                                                                                                                                               they are not worried.
                                        lation In New York, New Jersey and          lawyers, the very idea of a national     business matters as well.                            “H~stortcaily, free plans start out                their own behalf.                                   answer will depend on how often cus-
work, for $160 a year And Hyatt         Conneoticut such plans are generally        prepaid legal-services plan was un-        Amway, like Montgomery Ward                                                                              “The best quahtv control is having               tomers use the services and how
                                                                                                                                                                                nicely and then, since they don’1 have
Legal Semites offers the SIO-a-month    regulatd by the state insurance de-        thinkable. fndti, the ftrst-genera-       and others, pays local lawyers to pro-                                                                 your own delivery- system, made ui                   often they bring m other work, such
                                                                                                                                                                                money to spend on promotion and ad-
Lawplan, for holders of Citibank        partments, but in all three slates         (ion plans were local operations in       vide the actual legal advice that its              verttsmg, peopie forget about them                  of people you know and                       h8ve    as divorces or real estate closmgs, for
c&it cards.                             some plans may be sold by non-msur-        which unions or employers hired a         10,000 members ask for. “Al least                  and they fade away,” Ms. Poulos Of                  tramed,” M r . H y a t t said.                       which they typically pay an addi-
   Prepaid legal-services plans, a     ers.                                        few lawyers to provtde workers with       half of our members are our own dis-               Montgomery Ward said.                                   Gail Koff, a f o u n d i n g p a r t n e r o f   tional $50 or $60 an hour.
product that barely exIsted IO years      More fundamentally, some con-            wills and advice on family or con-        tributors,” s8id Henry Emrich, the                   People who pay ror mdlvidual plans                 Jacoby 8 Meyers, made a similar as-                    “I don’t know yet if prepaid legal
ago, suddenly are being seen as a       sumer and legal experts wonder             sumer problems.                            coordinator of the plan, who is plan-             tend to use them a lot. Indeed, more                sessment. But bnth she and Mr. HyaU                  services 1s gomg to be 8 real good
great marketing opportumty             whether such plans, which must be           A Fast-Growing Segment                    ning to expand iI natIonwIde.                      than 20 percent of Montgomery                        must be measured m their criticism                  business, a good business or even 8
   About I7 milhon Americans are       high-volume operatmns to be profit-                                                     Most of the Other new plans, tnclud-             Ward’s subscrIbers use the plan each                of networks of outsIde lawyers, for                  margmal busmess,” M s . Koff s8id.
covered hy some sort of legal-service able, ofrer good legal advice, espe-            While many unions and employers        ing those developed by Montgomery                  month, Ms. Poulos said: “We’ve had                   Hplt’s Lawplan uses such a network                  “We know from our offIces that are in
package, mosl of them by plans pro-    cially when they move beyond routme         stlfl offer those plans and group plans   Ward and Hyatt Legal Services, are                 very good utllizatlon on ~111s and con-              in areas where I( has no offIces and                the Montgomery Ward plan that m
vtdcd by unions or organzalions to     matters. In many of the plans, all but      still cover the most people. the rast-    selling their services by mail, sending            sumer problems and family-related                   some of Jacohy 8 Meyers’s lawyers                    pie seem to use il ror a lot 0r con-
which they belong. But mostmiddle-     the sjmplest legal questtons Incur          est.growmg plans are the &es being        solicit8tions to millions of credtt-card           problems such as dtvorce, child sup-                at-? part of the Montgomery Ward                     sumer questIons that are fmstr8tmg
mcomc Ameruznns still do not have      extra costs.                                sold to individuals.                      h o l d e r s . MOntgOmery Ward is prob            port or a kid in trouble. People use                net work.                                            from a legal pomt of vtew. If someone
lawyers. I.&ens of different con-                                                     “We’re over the first hurdle, the      ably the large81 o f t h e d i r e c t - m a i l   these attorneys not only for legal                                                                       wants to collect $300 from the dry
                                       Profitablll~y Is Unce#tain                  question of whether this idea is gomg                                                                                                            Relying on Private Practices
ccrns, including retailers, banks and                                                                                        plans, although others in the industry             questions, but as a resource for ad-                                                                     cleaner who rumed their dress, and
legal clinics, are scrambimg to carve     Finally, ror both the sponsormg or-      to work, and we’re into the phase of      dispute the retailer’s claim that it has           vtce on things like what to do with a                While large, prest!glous covrate                    meanwhile they’ve lost the receipt,
out a ptecc of that market - mostly    ganiz8tions and the partictpatmg law-       flgurmg out how to market it; said        200.000 subscribers. IXe Signature                 lump-sum retirement plan.”                          law hrms g e n e r a l l y s h u n p r e p a i d     that’s a hard thmg to handle in a cost-
by selling their services directly to  yers, there IS a lmgermg questton           Mr. Schwartz of the legal services in-                                                                                                                                                                effectlvc way. I can tell you that iaw-
the mdtviduals who ~111 be covered. in about JUSI how prorltable legal-serv-       stitute. “11% not like selling hamburg-                                                                                                                                                               yers will go out of bus ness if they’re
contrast to the old-style group plans  Ices plans will be.                         ers. It’s more like consumer educa-                                                                                                                                                                   getting lots of questi d!Is hke that.”