Legal Insurance Industry Trends

Is the Current Legal Landscape Affecting the Need to Find an Attorney?

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For decades, the United States has supported the most lawyers and boasted one of the highest numbers of attorneys per capita – around 40 attorneys for every 10,000 Americans. Despite those impressive numbers, is the U.S. legal system undergoing monumental challenges and historical changes, as industry analysts suggest, like former litigator Steven Harper in "The Lawyer Bubble: A Profession in Crisis"?

The answer is an emphatic "Yes," according to Nicolle Schippers, J.D., who serves as Associate General Counsel and Legal Industry Advocate at ARAG. For example, law schools nationwide witnessed a decrease in enrollment a decade ago, and number haven't risen much since. Schippers notes, "This is a major issue being discussed within law schools and Futures Commissions. Some of the decline is in part due to increased costs of law school, as prospective students are hesitant to take on that higher debt. That trend, coupled with the fact that big firms and corporations are hiring less than before, is causing a real shift in the future direction of the profession."

Ironically, in contrast to the slowdown in law school enrollment, the number of active attorneys continues to rise – with over 1.3 million in 2018 compared to 1.18 million in 2009. Their attorney fees are rising as well, with rates across the U.S. now averaging $368 an hour.1 With such a saturated lawyer market and higher-than-ever attorney fees, you'd think it would make it even more confusing (and cost-prohibiting) for people to turn to attorneys for legal help.

Yet as Schippers points out, "The reason people aren't finding an attorney is because they don't think they need an attorney. They are "googling" legal topics or handling the legal issues themselves." In fact, only 24% of people with a civil justice problem have used an attorney.2

Schippers fears the real issue is that people don't know they have a legal issue, and if they do know it, they are finding ways to manage it themselves.

"This leaves them vulnerable to additional liability and unexpected costs because of their unfamiliarity with the legal process," Schippers adds. "Additionally, many people feel that it's unaffordable to get legal counsel, so they just put if off."

For example, 17% of people don't seek assistance because of the cost. 2

Offering a legal insurance plan enables employees not only to skip the time-consuming step of locating the appropriate attorney for their issue, but also to obtain legal representation at an affordable cost.

ARAG legal insurance plans typically cost employees around $20 per month and give them access to more than 12,000 credentialed attorneys. Having a nationwide attorney network at their disposal helps employees identify an attorney to handle their legal needs.

In turn, employers can benefit from satisfied employees and increased workplace productivity, as employees aren't expending valuable time on the job dealing with legal matters. Contact us for more information.

1 Average attorney rates in the United States of $343 per hour for attorneys with 11 to 15 years of experience, The Survey of Law Firm Economics: 2016 Edition, The National Law Journal and ALM Legal Intelligence, November 2016.
2 Accessing Justice in the Contemporary USA: Findings from the Community Needs and Services Study, Rebecca Sandefur, American Bar Foundation August 8, 2014

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