Directions: Each passage in this section is followed by a group of questions to be answered on the basis of what is stated or
implied in the passage. For some of the questions, more than one of the choices could conceivably answer the question.
However, you are to choose the best answer; that is, the response that most accurately and completely answers the question, and
blacken the corresponding space on your answer sheet.
The Canadian Auto Workers’ (CAW) Legal
Services Plan, designed to give active and retired
autoworkers and their families access to totally
prepaid or partially reimbursed legal services, has
been in operation since late 1985. Plan members have
the option of using either the plan’s staff lawyers,
whose services are fully covered by the cost of
membership in the plan, or an outside lawyer. Outside
lawyers, in turn, can either sign up with the plan as a
“cooperating lawyer” and accept the CAW’s fee
schedule as payment in full, or they can charge a
higher fee and collect the balance from the client.
Autoworkers appear to have embraced the notion of
prepaid legal services: 45 percent of eligible union
members were enrolled in the plan by 1988.
Moreover, the idea of prepaid legal services has been
spreading in Canada. A department store is even
offering a plan to holders of its credit card.
While many plan members seem to be happy to
get reduced-cost legal help, many lawyers are
concerned about the plan’s effect on their profession,
especially its impact on prices for legal services.
Some point out that even though most lawyers have
not joined the plan as cooperating lawyers, legal fees
in the cities in which the CAW plan operates have
been depressed, in some cases to an unpro±table
level. The directors of the plan, however, claim that
both clients and lawyers bene±t from their
arrangement. For while the clients get ready access to
reduced-price services, lawyers get professional
contact with people who would not otherwise be
using legal services, which helps generate even more
business for their ±rms. Experience shows, the
directors say, that if people are referred to a ±rm and
receive excellent service, the ±rm will get three to
four other referrals who are not plan subscribers and
who would therefore pay the ±rm’s standard rate.
But it is unlikely that increased use of such plans
will result in long-term client satisfaction or in a
substantial increase in pro±ts for law ±rms. Since
lawyers with established reputations and client bases
can bene±t little, if at all, from participation, the
plans function largely as marketing devices for
lawyers who have yet to establish themselves. While
many of these lawyers are no doubt very able and
conscientious, they will tend to have less expertise
and to provide less satisfaction to clients. At the same
time, the downward pressure on fees will mean that
the full-fee referrals that proponents say will come
through plan participation may not make up for a