© Copyright 2006 Rogers Publishing Ltd. The following article first appeared in the February 2006 edition of BENEFITS CANADA magazine.
Benefits Trends: Legal-ease
Increasing numbers of large employers are discovering that adding prepaid legal advice to their EAP can be an inexpensive way to augment benefits.
By Anna Sharratt

IF YOU’VE EVER HAD A PROBLEM WITH YOUR LANDLORD, been presented with a prenuptial agreement or needed advice in the midst of a divorce, then you can recall with great clarity your work performance during that time. Likely, you spent much of your time on the phone—furiously jotting down notes, setting up meetings with lawyers, and dashing off for extended lunches to sign papers. Work, understandably, was an afterthought.

Employers, not surprisingly, want these legal matters resolved—quickly. To that end, many of the largest plan sponsors in Canada are introducing prepaid legal assistance plans as part of their employee assistance programs. The plans—essentially a diala- lawyer service—can quickly provide an employee with legal advice, later referring them to another lawyer for a more formal consultation.

“It’s becoming more common,” says Riyad Bacchus, new accounts manager-legal assistance with Sykes Canada, an assistance service company based in London, Ont. “As a benefit, it’s very flexible. It can be adjusted to accommodate the needs of any particular group.”

Craig Thompson, vice-president, business development with Wilson Banwell in Vancouver says the employee assistance plan (EAP)provider began offering the service in response to a high demand from plan members. “We were called upon for a variety of different issues that touched on the area of law—the issue of child custody, the issue of separation, the issue of divorce. So by virtue of being a full-service provider, it just made sense to have that type of provision in place.”

The main advantage of prepaid legal assistance plans—in addition to providing quick legal advice— is employees’ perception of them. For a staff member who faces a $200 hourly rate at a mainstream law firm, a telephonic consult can be a cost-effective method of gaining legal help. “For the employee, it’s high actual value, it’s high perceived value and very low cost to the sponsor,” says Bacchus. Thompson also points out that the initial conversation between the employee and legal assistance provider can reduce time spent with a costly law firm later on.

From a plan sponsor perspective, offering such a plan can help make the EAP more attractive, boosting staff retention. It can also be used as a bargaining tool when money is tight and salary increases are not an option. “If it’s collective bargaining, as opposed to pay increases, this is what’s offered,” says Bacchus. “[Employers can say to employees:] ‘We’ll augment your benefits; we’ll add a prepaid legal plan.’”

Adding the legal assistance plan can also reduce employee anxiety, ensuring that plan members have access to legal information immediately—without waiting for days to see a lawyer. For plan sponsors, that can help make the employee more productive and focused at work, while reducing absenteeism.

But can plan sponsors already maxed out on benefits costs take on another benefit? For larger employers, the product is often added to the EAP package at renewal. And the cost can be negotiated, ranging from $4 per person per use to a larger fee for unlimited usage by the employee group. With average usage at 7%, according to Sykes Canada, that cost may end up being fairly insignificant. In some cases, the plan sponsor can even negotiate the addition of the legal assistance plan with the provider for a minimal fee or waive the fee altogether.

There is also the issue of conflict of interest: employees asking for employment advice even though the sponsor is footing the bill for the legal service. But Thompson says the program is set up to avoid these types of eventualities. “When legal issues arise, most employers are cognizant that they want to make sure that there are some boundaries established. For example, if there are any issues about employment law.”

The trick to avoid such conflicts is to set down ground rules before the plan launches, says Thompson. After all, plan sponsors shouldn’t have to get lawyers involved.

Anna Sharratt is managing editor of BENEFITS CANADA.