Shielding the Employees, Protecting the City

I wrote some comments about LegalShield on Bernice’s blog last month—to my surprise, this issue is up for discussion at yet another city council meeting. I have revised my earlier commentary here.

If anyone wants to see some alternative opinions of LegalShield and other legal plans, Google "Is Legal Shield a scam?" or check out The Ripoff Report--click here.
 
Once again, LegalShield (formerly known as Pre-Paid Legal), the Multi Level Marketing (MLM) company that recruits salespeople to sell "legal plans" for commissions (and then urge those folks who signed up to become "independent sales associates"), is on the city council agenda as a discussion item. I thought the council had exhausted this discussion last month when, after the salespeople gave yet another extremely time-consuming sales pitch for this company, some members of the council voted to recommend that the city look into the services offered by this company. To allow these salespeople to waste the public’s time once again with another sales pitch for this company is galling! Since when is it advisable to have individuals seeking city contracts come before the council to pitch their commercial products? What's next? Shall we have HerbaLife (another MLM company) salespeople come to the city to make a pitch for a payroll deduction for that company's products and services? How about Amway?

Further, the Corporation Counsel said that even considering this issue was an administrative function and outside the ability of the governing body to do anything other than make a recommendation. 

And yet, and yet…our time is being wasted and the fudging continues. The question of whether the city should collect LegalShield's monthly bills from our employees or whether those employees should pay LegalShield the way they pay their other bills is not for the city council to decide, so I don’t understand why we must spend more time on it. 

Also, before the city could even entertain the notion of adopting LegalShield, they would have to look at its competition—such as Rocket Lawyer, Hyatt Legal Plans, ARAG Insurance, Legal Zoom, etc. At least two of these companies, ARAG Insurance Company and Hyatt Legal Plans (part of MetLife), offer these plans as employee benefits—however, they don't use the independent salespeople like LegalShield does.

These salespeople kept talking about city employees who didn’t have bank accounts and who wanted to use LegalShield for legal services. They offered absolutely NO DATA about how many employees did or did not have bank accounts, exactly how many wanted the service, and why the city should get involved in terms of creating a payroll deduction for this service, rather than having the individuals pay for it the way they pay their other monthly bills (by money order, check, or automatic bank debit). I must reiterate, as an automatic payroll deduction, LegalShield's bill would get paid BEFORE the mortgage/rent, the utilities, the food, etc.

Regarding this business of Plainfield employees who don't have checking accounts—we have no idea how many people the self-interested Legal Shield salespeople are even talking about—they kept changing the numbers every time they opened their mouths. Of the 80, 90, or 100 employees who they said expressed interest in Legal Shield's services, how many don't have checking/credit accounts? 5%? 10%? 20%? Are they talking about 5 individuals, 12 individuals? 30 people? What exactly are we talking about here? Why didn't those employees sign up then?
 

If the governing body even had the power to control payroll deductions for LegalShield, to not fairly review and consider the competition before making a recommendation would constitute a COMPLETE AND TOTAL FAILURE of the city council’s fiduciary responsibility.

I am wondering whether the employees who have expressed interest in a legal plan are aware of the competitors—certainly, they should know where they can get the most “bang” for their buck. For those who are among "the least of these,"* it is our fiduciary responsibility to make sure that they are broadly aware of the competitors. If the city wanted to see about offering a legal plan as an employee benefit, I am sure that they would do their research, have these plans vetted through our city's legal team, consider whether this is something that they want to do, and then make a presentation to the employees. 

Again, as LegalShield is just one of many companies offering legal insurance services and products, it would behoove the city to ensure that the employees are made aware of these other entities so that they can make a more informed choice—rather than just hearing one sales pitch. From what I could see, there is nothing that LegalShield offers that these other companies don't—but employees wouldn't know that unless the other companies, too, are allowed to make their pitches.

No one could possibly take seriously the pitches by salespeople who say their product is superior when in the absence of data, and when they stand to make a windfall profit. It is my recommendation that the administration (should it choose to do so) make ALL these competing legal plans so that the employees have FULL DISCLOSURE of the plans’ benefits and limitations.  

To reiterate, if an employee wants this service, he or she can pay with a money order. You should know that Legal Shield has a Payment Option Form that can be filled out—THE INDIVIDUAL WANTING THE SERVICE CAN MAIL IT IN WITH A MONEY ORDER—the same way, I would assume, that they would pay other bills. You wouldn't know this if you listened to self-interested salespeople. 

I am concerned that anyone would take the word of self-interested salespeople (whether or not they live in our city) who go around promoting a service—it is the job of the city council to make sure that we protect the employees of the city by making sure that services are thoroughly vetted before foisting them on the employees of the city as a "benefit" to them. The sales packet shared with the council by the sales person didn't contain any information that one couldn't get on one's own—it was just broad, self-serving information about Legal Shield. Oddly, it didn't mention their past troubles with the SEC.

There is no reason why someone who wants this product (and who may not have a checking account) cannot send a money order each month to Legal Shield. Again, the self-interested Legal Shield sales operatives continue to frame their argument as helping all these employees who don't have checking accounts—but WE know that the Legal Shield reps will make significant commissions off the employees, and the city would, in effect, be serving as LegalShield’s bill collector.

I am still disturbed by Mr. Dunn's lack of disclosure about his personal financial interest in this company. Not once did he acknowledge that he stands to make money if employees sign up. Not once. If one goes to the Plainfield Chamber of Commerce's website, one could see how much free advertising Mr. Dunn is doing for this company--do the other Chamber members get free advertising as well? Click here. If we have employees who are struggling, they should be directed toward reputable credit counseling services--not toward being part of a monthly windfall for a privately-held company like Legal Shield, which is only after the automatic payroll deduction.

My concern is for the employees and the city not to be taken in by continued hucksterism and misleading representations. One of the things the Legal Shield reps kept speaking of in their earlier representations was the idea of protecting employees against "Identity Theft"—that's the way these multilevel marketing companies work—they sign people up for a basic service that seems inexpensive, but when they add on all the other services (usually by creating fear-based, worst-case scenarios), the employee ends up dedicating a significant amount of money to the company—often upwards of $40-50 per month.

I am well aware of how banking practices have disproportionately affected lower income people, and especially African Americans, who then are forced to go to check cashing places (and sometimes payday lenders) to perform their banking needs. THAT issue (a huge one) has NOTHING to do with Legal Shield's self-interested sales representatives attempting to take advantage of the desperation of people who currently may not have access to checking accounts by taking the money through a payroll deduction. Again, employees would be better served by being made aware of the various credit counseling services that are available to them for FREE through the government.

All best,

Rebecca

*A final note: The appointed councilwoman from the 3rd Ward used the word "elitist" to negatively characterize me--which deeply offended me, because she doesn't know me or my background; to deliberately use code words and terms to play to a perceived audience of "the least of these" is the worst kind of pandering. For anyone to build a straw man argument that I don't care about those employees and others who struggle with their finances shows that they haven't bothered to even look at my record--haven't even bothered to look in any detail into what this company is all about. Instead, they deflect the topic to make it about me being an "elitist." Because I don't support Legal Shield as a payroll deduction, I am an elitist? I know many of the employees who work for the city--among those who live here, many are my constituents--they would beg to differ with anyone who termed me an elitist, because they know me, and they know that I work hard to serve them.