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U.S.
financial institutions, such as banks, insurance companies, credit card
companies, pre-paid legal insurance providers, and stock brokerage firms
are searching for ways to extend their service offerings to
related services that support their core offerings. Through strategic
partnering and cross-marketing relationships with specialized providers,
U.S. financial institutions are able to offer a more comprehensive array of
services to their customers and enhance customer loyalty and retention.
In the competitive financial services arena of today, the institution that
is able to offer the most comprehensive package to their customer base
wins the game. Legal services can become an important component of a
financial institution's product line.
 The
Present and Future Market |
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Financial institutions
are fast becoming supermarkets for financial and other related services. Thus, American Express offers not only credit card services, but loans,
brokerage, financial advisory services, accounting services to small
business, and banking services. But Bank of America also also offers,
credits cards, tax preparation services through Turbotax, financial
advisory services, brokerage services, and insurance. In the battle for
differentiation, the offering of personal legal services as an adjunct to
a financial institution's core services can be a decisive offering that
binds customers to the institution and increases customer loyalty.
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U.S. Regulatory Constraints to Service
Integration
In the United
States, non-law firms are still prohibited from delivering personal
legal services. A financial institution is not permitted, under the
both American Bar Association Model Rules of Professional Conduct and
the professional rules promulgated by every state, to employ lawyers
directly to serve the public. Recently a
Task Force of the ABA has been
busy working on a revised definition of the practice of law which
would strengthen the boundary between legal services being delivered
by law firms and other institutions. The ABA claims that this effort
is designed to increase consumer protections from fraud, while
increasing consumer choice. However, the U.S. Federal Trade Commission
has objected to the ABA's work in this area on the grounds that it is
in fact anti-consumer and anti-competitive. It remains to be seen
what the ABA Task Force will report in this area.
Thus, the U.S. legal
professional regulatory environment is becoming more restrictive than
the UK environment, in terms of giving consumers choices of how
they can purchase their legal services. Ironically, the number of
individuals who are searching for alternatives to traditional legal
service delivery methods continues to increase.
Specific changes
that would assist the competitive environment for legal services in
the U.S. include:
- An abolition of restrictions on which services lawyers
can provide to their employer's customers;
- an abolition of the current ban on fee sharing; and
- a relaxation of the introduction and referral codes.
We do not believe
that these changes will happen in the U.S. in the near future, but there
are alternatives that facilitate the integration of legal services
within a larger offering of personal and financial services.
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| MODELS FOR LEGAL
SERVICE DELIVERY INTEGRATION
We believe there is an opportunity for financial institutions to
deliver legal services as part of an integrated service package.
1. PRE-PAID LEGAL INSURANCE: The most important way
around U.S. rules governing the legal profession for financial
institutions is cross-marketing or pre-paid legal insurance. Pre-paid legal insurance provides a cost-effective method of providing
legal services to consumers, particularly when it is technology
enabled. Our pre-paid legal insurance partner, the
ARAGGROUP, one the largest
pre-paid legal insurance company in the world, and one of the largest
in the US, offers a comprehensive array of personal legal services,
that includes a fully developed
web-enabled digital delivery system supported by Epoq technology.
Pre-paid legal insurance is now a well-developed and mature industry
within the US and simply cross-marketing pre-paid legal insurance to a
financial institutions customers can be an important value add to a
complete package of financial services.
2. EMBEDDED E-LEGAL
SOLUTIONS:
An "e-legal solution" is a digital application delivered over
the Internet that is an alternative to legal services delivered by an
attorney. E-legal solutions include the dynamic assembly of
intelligent legal documents, legal information and FAQs legal databases, calculators, diagnostic checklists, and advisory systems
powered by artificial intelligence technology.
Examples of embedded legal solutions that can be offered to an
institution's customer either for free or at a very low cost, include
for example:
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The web-based
Estate Planning Center: an insurance company offers an Estate
Planning Center over the Internet for its customers that includes
information about estate planning, estate planning calculators,
interactive wills, living trusts, powers of attorney, living wills,
and health care powers of attorney.
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The Identity Theft
Center: A bank or credit card company offers an web resource that
provides information and support for victims of identity theft,
including intelligent legal documents that enable the customer to
manage more effectively the process of clearing their credit record. ARAG, our pre-paid legal insurance partner, offers management services
for consumers that complement our digital solutions and applications.
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The Business Legal
Information Center: A commercial bank offers to its small business
clients a comprehensive business legal information center over the Web
that includes dozens of interactive legal documents, including HR
documents, corporate documents, contracts, agreements, and letters,
that the small business owner can use in their business every day.
Epoq US, Inc. is
uniquely positioned to offers these e-legal solutions on a turnkey
basis, reducing the amount of upfront costs that would have to be
incurred.
If you are
interested in learning more about our approach to creating e-legal
solutions for your institution, click
here for more information.
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