Premium Essay

Legal Plan Services, Inc.

In: Business and Management

Submitted By halamir
Words 1521
Pages 7
Introduction Your firm has just signed a new client, Legal Plan Services, Inc. In order to acquaint yourself and the firm with the accounting procedures used at Legal Plan Services, your manager has asked you to review, assess, and make any necessary recommendations about the revenue and expense recognition currently used and assess the appropriateness of the associated presentation in the financial statements for Legal Plan Services.

Company Information

Legal Plan Services, Inc is a company that designs, underwrites, and markets legal services plans, called memberships. In essence, the plan allows the purchaser to use legal services of associated law firms for most types of civil lawsuits. The plans are sold through a network of independent contractor sales associates. Legal Plan Services sells their plans throughout the United States and in several Canadian provinces.

In fiscal year 2000, Legal Plan Services achieved the following financial results:

1. They passed the one million family membership level
2. The number of memberships grew by 35%, an increase achieved in all years since 1993
3. Cash flow from operations increased 25%
4. Revenues increased by over 28%
5. Membership persistency is 71.1%

In the president’s letter, Harland Rockwriter states, “Our members win because, in most cases, our members are the largest client our provider law firms have. Our members win because our home office provides real-time, continuous monitoring of the service levels our members receive. Our members win because member satisfaction is our highest priority.”

The most current financial statements are attached as a reference.

Product Information

Legal Plan Services markets four product lines: the Family plan, Business owners legal plan, Law officers legal plan, and Commercial Driver legal plans. Each plan covers specific legal risks...

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