The Stress That Stems From Legal Issues

Let’s take a moment to acknowledge that today’s employees have been through some stuff the last few years. They’ve weathered a pandemic and a shakeup in their work arrangements and are now most likely dealing with challenges like heightened financial issues, complex family matters, and an erratic economic outlook.

More and more, employees have been feeling the financial, mental and emotional strains of trying to balance it all—having a job, managing a household and finances while often caring for children as well as aging parents. As a result, their stress levels have climbed sharply. For example, heading into 2023, 37 percent of Americans1 rated their mental health as only fair or poor, up from 31 percent the year prior, and more than 25 percent of adults are anticipating more stress ahead. In addition, a record number of workers reported burnout this year—with women and those under 30 the most stressed.2

When these challenges turn into legal issues, it can send an employee’s stress levels even higher. This anxiety can stem from not knowing who to call, worries about paying expensive attorney fees or uncertainty around how the matter will turn out. Dealing with a legal event can eat into a person’s savings, steal away family and personal time, and linger in the backs of their minds as they try to focus on work.

Study shows the connection to legal matters
An October, 2022, stress research study from ARAG Legal Insurance examined how consumers address the legal issues they face—and the impact on their mental health and wellbeing when dealing with them. We surveyed U.S. consumers who used an attorney but did not have a legal plan, consumers who did not use an attorney or have a legal plan, and consumers with a legal plan, using ARAG members as a point of reference. All respondents were employed full-time.

These study findings provide compelling insights into consumers’ experiences with legal events that may factor into how brokers can help clients mitigate employees’ growing mental health concerns in the coming years.

First, legal issues happen more often than you think
There’s a misconception with most consumers that legal events are rare events. “That would never happen to me.” But they’re far more prevalent than consumers might think. The study found that 85 percent of individuals experienced a legal event in the past three years. These legal events range from bankruptcy to tax issues and adoption to credit card disputes. Understandably, many consumers may feel intimidated and confused over the lengthy legal processes and myriad paperwork involved. The study also showed that “going it alone”—addressing a legal issue without the help of an attorney or legal plan—greatly compounds the stress consumers feel.

The ARAG study findings reinforced what we have seen through Customer Care calls and member satisfaction surveys—that many of the stressful situations employees face day-to-day can quickly become legal issues for them and their families. Additionally, we’ve seen the volume of member interactions to our Customer Care team increase by nearly 10 percent so far in 2023.

The higher the personal stakes, the higher the stress
The study also found that the greater the severity of the legal issue and its potential financial impact, the more pressing it is to hire an attorney to help resolve it. Issues like this also come with higher levels of stress. Eleven of the top 15 legal events for which an attorney is most frequently hired are family-centered, making the outcome more concerning. Many of these issues also rank high on the Holmes and Rahe Stress Scale—like the death of a spouse or close family member, divorce or separation and change of financial state.3

When an attorney was hired, two thirds of respondents said that it had a positive impact on the outcome of their situation. However, when looking at the access to justice gap, those experiencing legal issues—particularly with a large financial impact—may not be able to pay for attorney fees on their own. This is where a legal plan can help with overall well-being.

Legal plans—also referred to as group legal insurance benefits—provide consumers with a set of services designed to protect them against a host of personal legal matters and help avoid costly attorney fees. Comprehensive legal plans work much like health insurance. For an affordable monthly premium, members have access to a network of attorneys and an array of online resources.

Uncertainty drives up stress levels
When navigating a legal problem, uncertainty comes from many places. Not knowing where to start, understanding the options, the potential impacts on work performance, and time and money spent to resolve the situation all weigh on consumers. For example, those working with an attorney but without a legal plan rated their stress levels at least 24 percent higher for each of these factors than those who have a legal plan.

Stress is taking its toll at work
So how does this impact your clients’ employees? Consumers who try to handle a legal situation without benefit of a legal plan or attorney experienced more stress, more time off work, and more negative impact on their mental health. The study revealed:

  • 37 percent said addressing their legal matter had a very negative or somewhat negative impact on their performance at work.
  • Only 41 percent of consumers in this group were able to manage their legal situation without taking time off work compared to 72 percent of those with a legal plan.
  • Consumers without a legal plan spent an average of 2.5 hours more than expected handling their legal matter, while legal plan members spent an average of one hour less than expected.

A broker weighs in on the impact of stress on employees
Jessica DePhillips, Voluntary Benefits principal at Mercer, offered her perspective regarding the increased stress levels on employees—and its probable cause. She notes, “In the most recent Mercer Inside Employee Minds study,4 we found that short-term financial strain, such as covering monthly expenses, is the number one concern at the top of employees’ minds. With nearly two-thirds of the American population living paycheck to paycheck, coupled with facing a potential legal matter, on top of an already strained economy, that is an anxiety-producing recipe for just about anyone.”

DePhillips says, “We know that employees who are dealing with a legal matter are most likely to be dealing with a financial situation as well—and losing productivity at work. And all of that is likely increasing stress and anxiety.”

She added, “A legal program can help employees by putting their mind at ease, providing legal representation as well as savings on legal matters so that employees can get back to the job at hand.”

The implications for business—and brokers
Stress causes around one million employees5 to miss work each day, costing US businesses billions yearly as a result. As stress and anxiety continue to weigh on employees, employers are proactively bolstering employees’ mental health resources, recognizing they’re critical to ensuring employee productivity, satisfaction and retention.

In fact, the majority of US employers plan to increase their investments6 in programs designed to promote better mental health, stress management and resilience. These include enhancements to employee assistance programs, digital health tools and financial wellness resources. Keep in mind that while these can be valuable resources, on their own they may not go far enough to address the more pressing legal issues that can arise.

For example, in working with clients, DePhillips discovered that a common misconception from employers is that their employees have legal services under their EAP program. She adds, “While many offer some type of legal assistance, their EAP does not provide an attorney to represent the employee in a legal matter or provide full coverage for legal work, such as creating a will, setting up a trust, buying or selling a home, and estate planning.”

I touched base with Brian Billings, director of Client Management at ARAG, who provided insight on ways you can help clients build a more holistic support system to address employees’ mental, physical and financial wellness:

  • Keep your eyes and ears open. Employee feedback is your most valuable source—and often an early warning—for understanding where stress is coming from. Ask if your clients can share any employee survey data, as well as input from employee resource groups who often represent and advocate for different communities and interests within the workforce’s population.
  • Encourage employees to take full advantage of their benefits. Work with carriers to help you offer your clients ongoing benefit communication for their employees so they’re more informed—and ultimately appreciate—all the services and nuances of their compensation package offers.
  • Help clients offer benefits that directly address mental wellness. When employees feel their employer supports their mental, physical and financial wellness, they’re apt to feel valued, more likely to remain at their job, and able to achieve the work/life integration they need to be their best.

In fact, APA’s 2022 Work and Well-Being Survey7 showed that more than 80 percent agreed that how employers support mental health will be an important consideration for them when they look for future work. This study also confirmed that employee expectations related to mental health support are shifting, with seven in ten workers reporting that they believe their employers are more concerned about employees’ mental health than in the past.

That’s a good sign, and an opportunity for your clients to answer the call by providing empathetic, responsive benefits.



As the VP, Customer Experience & Insights, Jennifer Beck is responsible for the overall experience of ARAG’s members through the research, analysis, and evaluation of current processes and future trends of both consumer expectations and industry innovations.

Beck can be reached at ARAG Legal Insurance, telephone 800-888-4184. Email: