Prepaid Legal Tax by tde19915

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                         AMERICAN BAR ASSOCIATION
            STANDING COMMITTEE ON GROUP AND PREPAID LEGAL SERVICES

                                      INFORMATIONAL REPORT
                                     TO THE HOUSE OF DELEGATES

         The Standing Committee continues to monitor developments related to its ongoing effort to
improve the delivery of legal services to clients of moderate means through legal service plans.
         The Standing Committee has continued to monitor the legislation and litigation regarding the
bankruptcy reform legislation. Residual effects from this law have continued to prevent providers from
taking on bankruptcy cases due to the increased liabilities, and the industry is still seeing an increase in
payments needed to compensate for the electronic filing software, additional investigative work, and
increases in professional liability insurance premiums. The Standing Committee will continue to monitor
the legislation and litigation regarding this law.

        In addition, the Committee is focusing a major portion of their efforts on reinstating Section 120.
An ABA legislative priority again this year, the provision would make it financially more attractive for
employers to offer this benefit to their employees as a pre-tax benefit. Legislation to reinstate Section
120 has been introduced in both the House and the Senate with strong bi-partisan support. With the
recent shift in Congress, the Standing Committee feels that new opportunities are presenting themselves
and are optimistic about the passage of Section 120, either as part of a larger tax package or with the
extenders in the fall.

        The Standing Committee, through its involvement in and oversight of the American Prepaid
Legal Services Institute (API), will continue to undertake educational programs, legislative efforts and
related activities intended to contribute to the continuing expansion of the legal service plan concept.

        The Standing Committee and API once again hosted the Annual Education Conference on
Group and Prepaid Legal Services. This year’s conference was held in Washington, DC and offered
the attendees an opportunity to meet with their respective elected officials to lobby for reinstatement of
Section 120. Julie Strandlie, of the ABA’s Governmental Affairs Office, helped provide training prior to
the meetings. Over 30 attendees went on 48 visits on both sides of the Hill. In addition, the conference
welcomed speakers from Employee Benefits Security Administration (EBSA), the American
Immigration Lawyers Association, as well as many plan providers and private practitioners throughout
the country. The Conference is the only national gathering of all the constituencies in the group and
prepaid legal services industry.

        The API continues to serve as a primary source for information on group and prepaid legal
services by distributing informational materials to lawyers, plan sponsors and legal service consumers.
Information is also available through the Internet on the Committee’s web site at:
http://www.abanet.org/legalservices/prepaid/home.html.       API Newsbriefs, a monthly four-page
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     newsletter reports on state and federal regulatory developments, features articles on members and
     developments in the industry, as well as news and events.

              The API also publishes its annual directory - Who's Who in Prepaid Legal Services, which is
     used by legal plan administrators to locate lawyers interested in providing services to plan members. Its
     Prepaid Legal Services Regulation Reporter, a 1200-page four-volume set, updated quarterly,
     contains statutes, insurance department summaries, pertinent sections of lawyer's ethics codes and
     resource data on each of the states, District of Columbia and Puerto Rico, plus a special section on
     federal law, model legislation and significant federal court decisions.


     Respectfully submitted,


     John Uilkema, Chair
     August 2007




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