By on February 16, 2009

The United Auto Workers (UAW) contracts are facing unprecedented public scrutiny. It could have something to with the fact that it’s now OUR money the automakers are pissing away—sorry, “lavishing upon” union members. Or it could be that the normally passive—sorry, “pro middle class” MSM’s smells blood in the union boss’ water. In any event, here’s one for working class heroes: free legal advice. The Freep: “Established in 1978, the UAW Legal Services Plan provides ‘personal legal services,’ to about 725k workers, spouses and retirees from several companies, according to the program’s Web site. It is the largest pre-paid legal services program in the country. Before I give the jumpers the inside dope (in a non Michael Phelps kinda way), you wanna guess how much 290 attorneys cost the Big 2.8 et al.? Seriously, you gotta guess. ‘Cause the Freep doesn’t even estimate the cost. Blood boiling? Ready for the jump then . . .

Three out of four autoworkers have used the legal services for a variety of purposes. In 2008, the letter said, that included:

Bankruptcy assistance: 9,392 UAW members, including 2,938 Ford members.

Divorce assistance: 6,899 members, including 1,924 Ford members.

Foreclosure assistance: 2,973, including 821 Ford members.

Real estate: 27,000, including 6,265 Ford members.

Now you could argue that the automakers agreed to this, let’s say, $50M boondoggle. So it’s not the union’s “fault” the shyster service exists. OK, sure, BUT—the UAW is “fighting to keep free legal services for its members.” That’s not what I’d call “shared sacrifice.” In fact, I’d say it’s a scam. Disagree? Sue me.

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19 Comments on “UAW Members Get Free Lawyers—And They Ain’t Giving Them Up for You...”


  • avatar
    Dynamic88

    I don’t disagree that the union should give this up, but I figure the cost at more like <38M, using data from the BLS;

    http://www.bls.gov/oco/ocos053.htm#earnings

    I suppose they need legal secretaries and office space, so yeah, maybe 100M.

    In keeping with Ken’s most recent editorial, this may have symbolic importance, but it won’t keep the lights on very long.

  • avatar
    Robert Schwartz

    @Dynamic88: Those guys don’t get paid all that well, and they certainly don’t use Class A office space. I figure one staff person per lawyer these days. I think $50 Million is probably closer to the number. But you are in the right ball park.

  • avatar
    Droid800

    @dynamic88

    Well yeah, but shit like this adds up fast, especially when we’re talking the UAW.

    Finding and cutting all of this excess garbage won’t save the automakers, but it will certainly help in the long term.

  • avatar
    yankinwaoz

    “unlimited free legal advice”….

    Sorry Robert. I can’t imagine that even the UAW is that stupid. Can you imagine telling your lawyer that he can bill an unlimited number of hours?

    This is my SWAG (silly wild ass guess) as to the reality. Being neither a union member or lawyer, I am going to base this on what I know about contracted legal services for collection agencies.

    The UAW puts out for bid a contract for legal services to law firms. The contract specifies unlimited services for members for a fixed fee. Of course a law firm would be insane to enter a contract where they had unlimited liability for a specific a limited revenue. So there must be a catch.

    With a fixed fee, neither the UAW or the car maker has unlimited liability. The law firm does, or not.

    So a firm takes the contract. But once they do, they have every incentive in the world to NOT spend money on servicing the contract. They do routine legal matters (divorce, bk, wills, etc), but use cookie cutter solutions farmed out to inexpensive secretaries, or even overseas “lawyers”. All the partners in the firm have to do it sign the documents to make it all, well, legal.

    Now if they get a UAW client with a complicated case, one that is going to drag on and on and might actually cost them money, then they are going to do everything they can do make sure that UAW member gets really, really bad and slow service.

    All the law firm has to do is just enough work to keep the UAW from getting seriously pissed off enough to cancel the contract. Beyond that, forget about it.

    Getting back to my experience with debt collection agencies. They work in the same way. They, or a creditor, will contract with a law firm to handle serious delinquent debtors. But the firm just goes through the motions. They send scary form letters on their letterhead. They file routine lawsuits hoping the debtor fails to show or just folds. But if they encounter a defendant that actually puts up a fight, then they fold because that means they might actually have to do some work.

    They exact same thing happens when companies hire cleaning companies. The cleaning company starts out great, but then starts cutting corners. They only need to do just enough to keep from getting fired. Anyone who has worked at a company that changes cleaning contractors has witnessed this phenomenon.

    Anyhow… I wonder how many UAW members have lost suits, been convicted, or been strong-armed into concessions that any competent lawyer would have seen right through. If I were a UAW member and needed legal council, then I would wonder these things. I would certainly not trust my life or liberty with these bozos.

  • avatar
    mikey

    In Canada there is a scale of fees.You can hire any lawyer you want if the lawyer charges a $1000
    the plan pays $600,the employee pays the rest.

    In Canada the GM worker gets nailed $745 on his taxable income even if he doesn’t use it.

    Its part of the present collective agreement.But
    IMHO not for long.

  • avatar
    ihatetrees

    yakinwaoz:
    I wonder how many UAW members have lost suits, been convicted, or been strong-armed into concessions that any competent lawyer would have seen right through. If I were a UAW member and needed legal council, then I would wonder these things. I would certainly not trust my life or liberty with these bozos.

    +1. Having had some experience getting jerked around with an discounted, employer provided lawyer on a Real Estate matter, I agree that you get what you pay for.

    Good attorneys cost money. They are worth it in time and lower blood pressure.

  • avatar
    OldandSlow

    The UAW may be facing a similar fate as the steelworkers. For GM to survive, it will probably have go through a wrenching and disruptive Chapter 11 bankruptcy.

    At that time – the UAW can go on strike to protest any give backs – but if GM doesn’t survive – there’ll be not future bennies at all.

    Come liquidation time Gettelfinger and the UAW may be looking at the middle finger.

  • avatar
    anoldbikeguy

    This is paid for by the union – from dues. No story here. How they want to spend their dues is their business.

  • avatar
    ptr2void

    @anonldbikeguy: Someone didn’t bother to read the article:

    “The program is funded by the automakers, as a benefit, based on the number of hours worked by UAW members. Companies that offer the benefit include Ford, GM, Chrysler, Delphi Corp. and American Axle & Manufacturing Holdings Inc.”

  • avatar
    golden2husky

    So a firm takes the contract. But once they do, they have every incentive in the world to NOT spend money on servicing the contract. They do routine legal matters (divorce, bk, wills, etc), but use cookie cutter solutions farmed out to inexpensive secretaries, or even overseas “lawyers”. All the partners in the firm have to do it sign the documents to make it all, well, legal.

    Now if they get a UAW client with a complicated case, one that is going to drag on and on and might actually cost them money, then they are going to do everything they can do make sure that UAW member gets really, really bad and slow service.…

    You nailed this one big time yankinwaoz. And not just with legal advice. Most times when government agencies contract out to consultants, the agency gets the “C” team who tries to max out billing hours while providing the minimum work to get the job done, well, minimally.

    With legal services, you would be surprised just how much “legal work” is done by paralegals and legal secretaries. My wife is a paralegal in a law office that specializes in real estate transactions (yes, part of that slimebag chain of opportunists that preyed upon homeowners to buy more house than they should and told them not to worry about it, values always go up) and the paralegal staff basically does all the work. Yes the attorney is present at the closing, but none of the heavy lifting on these “cookie cutter” closings is performed by the guy/gal with the law degree hanging on the wall.

  • avatar
    segfault

    In the US, most of the work is done by outside (local) attorneys. They pay well below the market rate, according to a fee schedule. Some of the services pay okay, but they really want you to sign up to be a “cooperating attorney” where you agree to take anything they send you. And they won’t pay anything for overhead, even if you have to make a thousand copies of something.

  • avatar
    no_slushbox

    I would have been really pissed off about this, but then I read:

    “Are there exclusions from Plan benefits?

    Yes. Examples include:. . .

    -Legal services that are against the member’s employer, or the employer’s subsidiaries, dealers or officers or agents;…
    -Workers compensation or Unemployment benefits involving the member’s employer; …
    -Any bankruptcy that would result in a discharge of a debt to the Member’s employer, to the Union or any benefits;…”

    As long as the legal plan isn’t helping workers sue their employers, which I have recently involuntarily become, it is trivial in the whole scheme of this bailout.

    290 attorneys cost, assuming a somewhat high salary for this kind of work of $150K, $43.5 million. Overhead and legal assistants usually double that number, so $87 million would be the total.

    That’s a drop in the bucket in this bailout, GM alone loses that in a couple days.

    Poor and middle class people get completely fucked with regard to legal representation, so it’s good to see that some people have it.

    Bankruptcy, divorce and foreclosure assistance is exactly what UAW worker need in so that they can move on with their lives in preparation for the eventual Chapter 11s, or, in Chrysler’s case, Chapter 7.

    After the Bankruptcies a Bankruptcy Court, which is the proper forum, will decide what benefits the UAW keeps, and if the UAW keeps anything.

  • avatar
    no_slushbox

    I’m sure that these are not the “best” attorneys, but they are probably much better than what the workers would find on their own.

    They recently took a case to the Supreme Court and won:

    http://www.uawlsp.com/InTheNews.asp

    golden2husky:

    Residential real estate is the worst. The attorney is just a sales person that networks with real estate agents and mortgage brokers, and then shows up at the closing with some documents she or he hasn’t read.

  • avatar
    Conslaw

    Facts about the UAW Legal Services Plan are readily available on the web. The plan servicing each automaker is an independent not-for-profit corporation. Financial statements are available at Guidestar.org. For example, GM’s plan’s Form 990 (annual report) is here. GM’s plan is by far the largest. 2007 revenue about $32 million, but legal services revenue goes down roughly proportionally to UAW total wages. The plans are funded based upon a formula relating to the number of hours worked by the UAW members at that employer, generally, it’s a few cents per hour. I don’t have current information, but it used to be less than $100 per year per employee, and it is taxable income to the UAW member, a negotiated fringe benefit paid in lieu of wages. It’s a fraction of what is spent on healthcare.

    UAW Legal Services staff attorneys generally make between $58,000 and $68,000 dollars/year regardless of experience. In other words, about the same as a teacher or UAW member (without overtime). Many attorneys stay for 20 years or more due to better-than-average work hours and family health insurance.

    Overall, it’s not perfect, but it’s an efficient way of delivering legal services to a population that would otherwise probably end up spending more by going without representation in situations where they should have it.

  • avatar
    Airhen

    I doubt they won’t keep this deal to some degree, seeing that their party is running DC. Unless they don’t build enough hybrids or start selling too many pickups/ SUVs!

  • avatar
    Ralph SS

    K. Now that they are on my payroll they get what I get.

    - No legal help.
    - 5 paid holidays/yr.
    - 1 wk vacation after 1yr.; 2 wks/yr. after that.
    - medical and dentil that costs so much and is so piss-poor that I don’t participate.
    - 1 personal day /6 mo.
    - Max. 3%/yr increase (none this year of course – I’m lucky to be working)

    Not bad for a skilled guy doing basically the same thing for over 25 years, no?

  • avatar
    picard234

    I pay $15/mo at work for this “perk.”

    If the Detroit 3 pay this much, the total for 725,000 people is $130,500,000 per year.

    Maybe they get a group discount?

  • avatar
    no_slushbox

    picard234:

    720,000 is the total amount of people receiving the benefit.

    There are only 192,000 active workers covered.

    Which is the really sick thing. All of the effort wasted on the bailout is saving at most 192,000 UAW jobs.

    For all the whining about millions of jobs, there are less than 192,000 Detroit automaker assembly workers working in this country (the 192,000 total includes some unionized suppliers and people directly employed by the UAW).

    http://www.uawlsp.com/about.asp

  • avatar
    Dragonstar

    I used to work for the program as a lawyer for several years. Overall most of the lawyers that work there are pretty good at the kind of law they happen to practice. Most of the lawyers specialize in areas of law that consumers need. Whether it be probate administration, bankruptcy, small claims court for all sorts of collection matters, warranty law and about any other way that the general public tends to get raked over the coals by larger companies.

    The program is run as a stand alone program and the lawyers only represent the UAW members, they are not permitted to take any outside legal jobs at all.

    Contrary to earlier posts, there are no “foreign lawyers” that answer clients’ questions. The program does also contract with outside “cooperating attorneys” but they are only used if the program does not cover a particular area of law, does not have a field office near the client or if the program has some conflict of interest that requires the use of outside counsel.

    Overall the program always seemed to work very well for those who used it. It gave people who otherwise might not be able to get good legal services access to it. If you want to see the quality of the legal work for yourself just look up the United States Supreme Court case of Till v. SCS Credit Corporation. It was a complicated bankruptcy issue in that case and in truth was an issue that, if the debtors lost, would have only cost them a couple hundred dollars more in their bankruptcy case. The UAWLSP won that case and saved the money for those clients and EVERY OTHER person who has filed bankruptcy since. If the UAWLSP did not take that case to the Supreme Court the issues in that case would likely never have made it there because it costs too much to litigate. Instead the pre-paid service took the case, won it, and ever since has been saving not only UAW members money in bankruptcy but everyone else as well.

    The same is true in other areas of consumer rights law. THe UAWLSP tends to blaze a trail, educating Judges and other lawyers about the myraid of consumer rights laws. Once educated, those Judges and lawyers apply those laws to other cases that come before them (especially in small claims court), usually to the benefit of people that have no idea that it was a UAW lawyer that helped them out.

    I know it is popular to bash lawyers, but most of the lawyers that work for the program tend to truly have their clients’ and all consumers’ best interests in mind.


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