How Legal & Identity Theft Issues Are Impacting Employee Productivity & Retention

Key takeaways

• 56% of employees faced legal matters last year, with 94% reporting stress from these experiences
• 77% of employees experienced identity theft or cybersecurity issues
• Legal challenges caused 61% of affected employees to miss work, with 85% needing at least one full day away
• Benefits significantly impact retention, with 58% reporting increased job satisfaction and 57% indicating stronger loyalty
• Integrated legal and identity theft protection benefits provide protection against both traditional and digital threats

The hidden workplace crisis

In today's evolving workplace, HR leaders and benefits professionals face a constant challenge: identifying which benefits truly matter to employees while delivering measurable business value. Our comprehensive research has uncovered a significant yet frequently overlooked workplace disruptor affecting both your employees and your bottom line.

The surprising scope of the problem

Our recent study of 1,004 full-time U.S. employees revealed a concerning reality: 56% of employees faced legal matters last year, with an overwhelming 94% reporting these experiences as stressful. These aren't isolated incidents but widespread challenges affecting more than half of the typical workforce.

Even more concerning, 77% of employees experienced identity theft or cybersecurity issues within the past year. As our lives become increasingly digital, these threats continue to grow in both frequency and sophistication.

The workplace impact of personal legal challenges

The impact extends far beyond personal stress. Among employees facing legal challenges:

• 61% needed time off work to address their legal matters.
• 85% required at least one full day away from their responsibilities.
• 78% spent over $500 on attorney fees, creating financial strain that impacts workplace focus and productivity.

These statistics reveal a clear connection between personal legal challenges and workplace disruption. When employees struggle with legal matters or identity theft concerns, their productivity, focus, and overall wellbeing suffer—creating tangible business costs for employers.

The protection gap: why employees are vulnerable

Despite the prevalence of these issues, most employees lack adequate protection:

• 26% have no legal protection whatsoever.
• 34% rely on expensive pay-as-you-go legal services with unpredictable costs.
• 49% are missing essential legal documents they need for security.

This protection gap creates a significant vulnerability for both employees and employers. When legal challenges or identity theft issues arise, employees are often left scrambling to find solutions—typically during working hours and at considerable personal expense.

"When employees lack proper legal and identity theft protection, the costs don't disappear—they simply shift to reduced productivity, increased absenteeism, and diminished wellbeing,” says Emily B. Rose, President of the Benefits Solutions Division at LegalShield.

Most requested legal services: what employees actually need

Our research shows that employees recognize the value of legal and identity theft protection benefits. Among the most requested legal services:

1. Will and estate planning (57%) - Addressing the foundational documents most adults need
2. Family law services (38%) - Covering divorce, custody matters, and other family legal needs
3. Real estate matters (26%) - Supporting home purchases, rental issues, and property concerns

The broad range of needs demonstrates that legal benefits aren't just for crisis situations—they provide ongoing value across various life stages and circumstances.

Download our complete 2025 Legal and Identity Protection Research Report

The business case for legal and identity theft protection benefits

For employers, the business impact is clear. Organizations providing legal and identity theft protection benefits see measurable improvements in key metrics:

• 58% of employees report increased job satisfaction with legal benefits.
• 57% indicate stronger job loyalty when these benefits are available.
• 65% report higher satisfaction levels with identity theft protection benefits.
• 62% attribute increased loyalty to identity theft protection benefits.

These numbers should capture the attention of any HR leader focused on retention and employee satisfaction. In today's competitive talent landscape, these benefits create a meaningful differentiation in your total compensation package.

The digital dimension: addressing cybersecurity concerns

The digital dimension of this challenge cannot be overlooked. With 77% of employees facing identity theft or cybersecurity issues and 42% indicating these concerns increase workplace stress, addressing digital vulnerabilities has become essential.

Employees are actively seeking solutions, with 78% wanting proactive cybersecurity training. This represents an opportunity for employers to address a significant source of workplace anxiety while demonstrating investment in employee wellbeing.

The integrated solution: dual protection for today's workforce

Traditional approaches to legal and identity theft challenges often involve fragmented, expensive solutions—or leave employees with no protection at all. Employer-sponsored legal and identity theft protection benefits provide a  cost-effective alternative.

How integrated benefits work

These integrated benefits offer:

• Direct access to experienced provider law firms with guaranteed response times
• 24/7 emergency coverage for covered emergencies
• Real-time alerts for detected threats to personal information
• Licensed Private Investigators for identity restoration
• Predictable monthly costs via payroll deduction
• Digital solutions aligned with modern workplace needs
• Educational resources to help employees maximize benefit value

By offering both legal and identity theft protection benefits, employers address two significant sources of employee stress and workplace disruption while strengthening retention and demonstrating investment in employee wellbeing.

Making the decision for your organization

As you evaluate your benefits portfolio for the coming year, consider the hidden costs of legal and identity theft challenges in your organization. The data clearly shows these issues are affecting your employees' productivity, wellbeing, and loyalty.

By adding integrated legal and identity theft protection benefits, you can:

1. Reduce absenteeism by providing easy access to professional assistance.
2. Improve financial wellness through predictable, affordable benefits.
3. Enhance employee satisfaction and loyalty with highly valued benefits.
4. Protect productivity by minimizing workplace disruptions.
5. Demonstrate investment in employee wellbeing and security.

Additional resource: Boost Employee Well-being with Legal & ID Theft Protection

Frequently asked questions about legal and identity theft protection benefits

How much do legal and identity theft protection benefits typically cost per employee?

Legal and identity theft protection benefits are surprisingly affordable, typically costing less than other voluntary benefits. For a small monthly payroll deduction, employees gain access to legal services and identity theft protection plans that would cost significantly more if purchased individually.

What types of legal matters are covered by employer-sponsored legal plans?

Most employer-sponsored legal plans cover a wide range of personal legal matters including Will preparation, family law issues, real estate transactions, traffic violations, consumer protection, and more. Plans typically include phone consultations, document review, and representation for covered matters.

How do identity theft protection benefits differ from what credit card companies offer?

Unlike the limited monitoring services offered by credit card companies, identity theft protection benefits include proactive monitoring across multiple data sources, real-time alerts, full-service restoration with licensed investigators, and reimbursement for certain theft-related expenses through an identity fraud protection plan.

How quickly can employees expect legal assistance when needed?

With LegalShield's employer-sponsored plans, employees receive call-backs from their provider law firm within 4-8 business hours for standard matters, and 24/7 emergency access for covered situations requiring immediate attention.

Can employees use these benefits for both preventive and reactive needs?

Yes, these benefits are designed for both preventive measures (creating Wills, reviewing contracts, monitoring personal information) and reactive situations (addressing identity theft, handling legal disputes). This comprehensive approach ensures employees are protected before, during, and after challenges arise.

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‍This article is based on LegalShield's October 2024 survey of 1,004 full-time U.S. employees with access to benefits, balanced by age, race, and other demographic variables according to U.S. Census data.