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Formerly called
  • Sportsman's Motor Club (1972–1976)
  • Pre-Paid Legal Services, Inc. (1976–2011)
Industry Multi-level marketing, Legal services
Founded 1972; 45 years ago (1972)
Founder Harland Stonecipher
Headquarters Ada, Oklahoma, U.S.
Areas served
  • United States
  • Canada
Key people
  • Legal services
  • identity theft monitoring and restoration
Revenue est. $400 million[1] (2014)
Owner MidOcean Partners
Number of employees
700[3] (2014)

LegalShield (previously known as Pre-Paid Legal) is an American corporation that sells legal service products through direct sales and multi-level marketing in the United States and Canada.

The company was founded August 8, 1972 as the Sportsman's Motor Club. In 1976 it was incorporated as Pre-Paid Legal Services, Inc., and made its initial public offering in 1984.

Pre-Paid Legal Services, Inc. went from being traded on the New York Stock Exchange back to a private company in 2011 when it was acquired by MidOcean Partners for $650 million and subsequently changed its name to LegalShield.

Company description[edit]

LegalShield develops and markets pre-paid legal service plans through a network of more than 6,900 independent provider attorneys across the U.S. and Canada. The company also markets an identity theft monitoring and restoration services through its partnership with Kroll Inc..[4] The company's service plans are sold through its business-to-business channel (B-2-B), its employee benefits division, and also through its multi-level marketing division.[5]


Exterior of the company's headquarters in Ada, Oklahoma (2012)

On July 11, 1969, former CEO and founder Harland C. Stonecipher of Ada, Oklahoma, was involved in a motor vehicle accident and was hospitalized. Although the other party was cited for fault, they filed a suit against him for the accident.[6] He hired a lawyer to defend himself in court, but in doing so, depleted his life savings. After researching the industry of European legal expense plans, Stonecipher created Pre-Paid Legal's predecessor, the Sportsman’s Motor Club, on August 8, 1972. The club offered legal expense reimbursement to its members. Pre-Paid Legal began using "network marketing" (multi-level marketing or MLM) in 1983. Pre-Paid Legal went public on the NASDAQ National Market System in 1984. In 1997, Pre-Paid Legal bought the People's Network (TPN), a satellite television network dedicated to personal development. Two years later, the company moved to the American Stock Exchange and then on May 13, 1999, Pre-Paid Legal was listed on the New York Stock Exchange.[7]

In 2001, the Wyoming Attorney General issued a press release announcing "When we discovered that Pre-Paid was using prohibited income representations to promote their multilevel marketing program, we warned them that the representations were prohibited by Wyoming law". Pre-Paid paid $4,000 in lieu of civil penalties, reimbursed the state for $1,000 in costs, and refunded $2,000 to participants who claimed to have been misled.[8][9] In July the same year, the company was forced by the U.S. Securities and Exchange Commission (SEC) to stop counting the commissions they paid out to sales associates as assets, instead of expenses,[10] the same way other types of insurance companies do, though they did not release their updated, halved, 2000 earnings figures until February 2002.[11]

Pre-Paid Legal has faced ongoing troubles in Mississippi. After the company settled complaints in 2001, a number of similar suits arose. The company won in a jury trial against two plaintiffs,[12] but after losing others, including one in which a former customer was awarded $9.9 million[10][13] settled with more than 400 others. The company, and the U.S. Chamber of Commerce of which Pre-Paid Legal CEO Harland Stonecipher is a director,[14] have described the lawsuits against the company as "frivolous" and "abusive".[15]

Pre-Paid Legal reported to the SEC that less than 25% of its sales representatives sold more than one insurance plan in 2005, but avoids reporting such information to prospective sales representatives.[16]

In October 2009, Tulsa World reported[17] that Pre-Paid Legal had been subpoenaed by the SEC for various documents including those pertaining to a stock repurchase program that Pre-Paid started in April 1999. (And in 2006, the company said it would repurchase $27.4 million of shares owned by executives.)[16] The SEC reported that thus far that its demand for documents is a "fact finding" mission.

On November 19, 2009, Pre-Paid Legal announced[18] that it received a complaint from the Federal Trade Commission (FTC). The proposed draft complaint alleged that Pre-Paid's "ADRS program and related materials violate Section 5(a) of the FTC Act regarding asserted misleading representations, express or implied."[19] On July 27, 2010 the FTC ended its three-year investigation of Pre-Paid Legal Services, Inc. without any action.[20]

In January 2011, Pre-Paid Legal agreed to merge with entities formed by MidOcean Partners, a private equity firm headquartered in New York which it says is "focused on the middle market." The transaction would result in the company becoming privately held. The deal closed on June 31, 2011.[21] Beginning in July 2011, Rip Mason served as Legal Shield’s Chief Executive Officer.

On September 10, 2011, the company announced [22] that it would change its name to LegalShield. The new corporate name for the 40-year-old company was said by the company to be part of an overall re-branding initiative following the acquisition of Pre-Paid Legal Services, Inc. by MidOcean Partners.

In July 2014, Jeff Bell was appointed Legal Shield's Chief Executive Officer replacing Rip Mason. Rip Mason assumed the position of Chairman of the Board.[23]


  1. ^ a b c d Silcox, Beth Douglass (March 2, 2015). "Company Spotlight Equal Access, Equal Adaptability: LegalShield’s Moral Imperative to Grow". Direct Selling News. Plano, Texas: VideoPlus. ISSN 1554-6470. Retrieved March 8, 2017. 
  2. ^ a b c d e "Company Information: Leadership". LegalShield. Retrieved March 8, 2017. 
  3. ^ Burkes, Paula (September 7, 2014). "Executive Q&A: LegalShield chief comes home to Oklahoma roots". The Oklahoman. Oklahoma City: The Oklahoman Media Company. Retrieved February 24, 2017. 
  4. ^ "Pre-Paid Legal Services to Add Identity Theft Benefits Provided by Kroll Background America". Kroll Inc. Retrieved March 7, 2010. 
  5. ^ "Pre-paid legal services: Worth the money?". 
  6. ^ "Pre-Paid Legal Services, Inc. | Executive Bios". Retrieved March 7, 2010. 
  7. ^ "Pre-Paid Legal Services, Inc. | The Pre-Paid Legal Story". Retrieved March 7, 2010. 
  8. ^ Bernick, Bob, Jr. (October 30, 2008). "Shurtleff's Fundraising Trounces Hill's | Deseret News (Salt Lake City) Newspaper | Find Articles at BNET". Archived from the original on October 31, 2009. Retrieved October 23, 2009. 
  9. ^ "Newell letter" (PDF). Retrieved October 23, 2009. 
  10. ^ a b "Pre-Paid Weathers Guilty Verdict",
  11. ^ Morgenson, Gretchen (April 18, 2003). "Exchange to Warn Investors on Companies". New York Times. 
  12. ^ Davis, Melissa (October 20, 2004). "Pre-Paid Prevails in Mississippi Case; Financial Articles & Investing News". Retrieved October 23, 2009. 
  13. ^ "Verdict Hammers Pre-Paid,
  14. ^ "U.S. Chamber of Commerce - June 27 - U.S Chamber Reappoints Harland Stonecipher, CEO of Pre-Paid Legal Services, to Board of Directors". U.S. Chamber of Commerce. June 27, 2005. Retrieved October 23, 2009. 
  15. ^ "U.S. Chamber of Commerce - Nov 24 - Chamber Joins Miss. Case against Frivolous Lawsuits - Pre-Paid Legal Services Targeted Improperly". November 24, 2004. Retrieved October 23, 2009. 
  16. ^ a b Duhigg, Charles (November 13, 2006). "Why Short Sellers Want to Crash the Tupperware Party". New York Times. Retrieved October 14, 2009. 
  17. ^ "SEC asks Pre-Paid Legal for documents". Tulsa World. Retrieved October 23, 2009. 
  18. ^ "Pre-Paid Legal Services Announces FTC Developments". Pre-Paid Legal Services. Retrieved November 19, 2009. 
  19. ^ "Pre-Paid Legal (PPD) Received Draft Complaint from FTC Relating to ITSADRS Program". November 11, 2009. Retrieved September 26, 2010. 
  20. ^ "FTC ends investigation of Pre-Paid Legal". July 27, 2010. Retrieved July 28, 2011. 
  21. ^ Winslow, Laurie (February 1, 2011). "Pre-Paid to Merge with MidOcean". Tulsa World. .
  22. ^ "Pre-Paid Legal Services Becomes LegalShield". Pre-Paid Legal Services. Retrieved September 22, 2011. 
  23. ^ PR Newswire. "LegalShield Names Jeff Bell as Chief Executive Officer". Reuters. Retrieved 7 September 2014. 

External links[edit]