User:16912 Rhiannon/LegalShield

LegalShield is a United States-based privately held company offering pre-paid legal services and identity theft product solutions for individuals and businesses, that uses multi-level marketing, business to business, and direct-to-consumer marketing to sell its products. LegalShield is headquartered in Ada, Oklahoma, and conducts business throughout the United States and Canada.

Business model
LegalShield offers pre-paid legal services and identity theft solutions for individuals, families, and businesses in the United States and Canada via multi-level marketing, business to business, and direct-to-consumer sales.

Headquartered in Ada, Oklahoma, LegalShield develops and markets its pre-paid legal service products for both personal and business. The company's plans include services such as preparation of wills and living trusts, health care, IRS tax audit assistance, and trial defense for individuals. For small businesses, the plans can include services such as preparation and review of contracts and other documents, debt collection assistance, employee benefits support, legal correspondence, and trial defense services. LegalShield had 1.6 million users in January 2017.

IDShield is a division of LegalShield that provides identity theft protection through a team of licensed private investigators. The services offered by IDShield include security and privacy monitoring, emergency support, and complete identity theft recovery. Both IDShield and LegalShield have mobile apps available to their users.

As of 2017, the company undertakes research and publishes a monthly report called the LegalShield Law Index.

In 2017, LegalShield released Launch by LegalShield, or simply Launch, which helps people establish new businesses. Launch includes a three-month LegalShield membership to provide customers with legal counsel to assist their new business formation and personal needs. LegalShield has partnered with Jacques Slade, a YouTube personality, to promote the service. LegalShield and Slade promoted Launch at the annual South by Southwest festival and conference in 2017.

Pre-Paid Legal
LegalShield was established as Sportsman's Motor Club in 1972, then known as Pre-Paid Legal Services, Inc. from 1976 until its acquisition by MidOcean Partners in 2011. Harland Stonecipher (1938–2014) served as the company's founding president and chief executive officer (CEO). The life insurance salesman from Ada, Oklahoma, created Pre-Paid's predecessor, a "motor service club", after being involved in a car accident in 1969. Although the other party was cited for fault, they filed a suit against him for the accident. Stonecipher had health, life, and vehicle insurance coverage, but was required to hire a lawyer to defend himself in court and struggled to pay associated legal expenses. After researching the industry of European legal expense plans, he created the Sportsman's Motor Club to reimburse members for legal fees.

The club changed its name and incorporated as Pre-Paid Legal Services, Inc. in 1976, becoming the first company in the United States to provide pre-paid legal plans for individuals. Initially, members could choose their own lawyer and seek reimbursement from Pre-Paid, but by the 1980s, the company established a way to direct members needing legal assistance to preselected firms. The company went public in 1984. Pre-Paid was first listed on the NASDAQ, then moved to the American Stock Exchange in 1986, followed by the New York Stock Exchange in 1999, being listed as "PPD". In 1998, Pre-Paid acquired The People's Network, a marketing company based in Dallas.

In 2001, the Securities and Exchange Commission required Pre-Paid to stop counting the commissions paid out to sales associates as assets, instead of expenses, which reduced reported earnings by over half. Pre-Paid did not file its financial statements for 2000 until February 2002. The statements showed decreases in earnings from $43.6 million to $20.5 million and stockholder equity from $147 million to $42 million. Also that year, 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.

The Denver Business Journal reported in 2002 that Pre-Paid earned a $27.1 million profit on $303.7 million in revenue, an increase from its $1.9 million profit on revenues of $129.6 million in 1997, and provided its members access to a network of 46 firms with 1,270 lawyers.

About 30 lawsuits by approximately 250 plaintiffs were filed in Alabama in 2004 against Pre-Paid. All of these were dismissed or settled by 2006. Pre-Paid faced two lawsuits in Mississippi in October 2004 and February 2005. A jury ruled in favor of the company in the first suit. In the second suit a jury found Pre-Paid and Stonecipher guilty of deceptive advertising and fraud. In November 2005, Pre-Paid and Stonecipher were required to pay $9.9 million in punitive damages. TheStreet.com reported that Pre-Paid faced additional lawsuits filed by 400 Mississippi plaintiffs. These were ultimately settled. TheStreet.com also noted that the company has had a number of legal successes, including the defeat of a class action lawsuit alleging the company was a pyramid scheme, as well as overturning a fraud verdict. The company and the Oklahoma Chamber of Commerce, of which Stonecipher served as a director, described the lawsuits against the company as "frivolous" and "abusive".

Pre-Paid's independent auditor was unable to approve the company's 2004 financial statements because of "material weaknesses" related to the processing of commissions. New rules proposed by the Federal Trade Commission (FTC) required Pre-Paid to disclose to potential associates that less than 25 percent of its sales representatives sold multiple insurance plans in 2005, which the company confirmed in a U.S. Securities and Exchange Commission (SEC) filing. In November 2006, Pre-Paid announced plans to spend $27.4 million to repurchase shares owned by executives.

In 2007, the FTC began investigating Pre-Paid's marketing of its identity theft service and Affirmative Defense Response System (ADRS), which the company developed to increase group sales. Pre-Paid changed its marketing materials in 2009, after regulators found the company’s claims misleading regarding ADRS. According to an SEC filing, the FTC and Pre-Paid "[reached] a mutually agreeable solution", and in 2010 the agency ended its three-year investigation without any action. Pre-Paid remained the focus of an informal SEC inquiry; the agency requested documentation about the company's stock repurchasing, consumer complaints related to provider law firms, payment card compliance, Stonecipher's resignation in April 2010, as well as the resignation of director Tom Smith. The company reportedly earned $454 million in 2010.

LegalShield
After receiving an offer in October 2010, Pre-Paid was purchased by the New York City-based private equity firm MidOcean Partners in January 2011, in a cash transaction valued at around $650 million. Pre-Paid became a privately held company following completion of the sale in June 2011. The company's title was changed from Pre-Paid Legal Services to LegalShield.

On July 1, 2014, Jeff Bell was appointed LegalShield's CEO, replacing Rip Mason, who began serving as executive chairman of the company's board. In September 2014, LegalShield employed 700 people, and had 300,000 associates and 1.4 million customers; members had access to 1,000 attorneys. Following Stonecipher's death in November 2014, The New York Times reported that LegalShield represented more than 1.4 million American families, or 3.7 million people, in 49 U.S. states. In November, the company announced personnel and organizational changes to "strengthen operational effectiveness and efficiencies".

In March 2015, Direct Selling News said that LegalShield's call center responded to 2 million member calls for legal help in 2014. Furthermore, the magazine reported that nearly 47,000 small companies used LegalShield services in 2014, and 34,000 larger businesses made its legal and identity theft plans available to their employees, representing approximately 30 percent of LegalShield's business, which was estimated at $400 million (2014). The company acquired Shake Law in 2015.

In 2016, Advertising Age published an article written by Bell, in which he responded to the November 6 episode of Last Week Tonight with John Oliver about multi-level marketing. In the op-ed, Bell said he left the Direct Selling Association's board and cancelled LegalShield's (which he says has used "ethical direct sales strategies since 1993") membership over the organization's failure to protect and regulate the marketing industry.

The company hosts an annual convention. The 2016 event in Oklahoma City attracted 10,000 participants.

Rankings and recognition
In 2007, Pre-Paid was included on Forbes' list of "The 200 Best Small Companies" for the first time, ranking number 120. The company ranked #130 and #66 on the business magazine's same lists for 2008 and 2009, respectively. In 2010, Pre-Paid ranked number 78 on Forbes' list of "America's 100 Best Small Companies". Direct Selling News included LegalShield in its list of the "Best Places to Work in Direct Selling" in 2016.

, it reported over 1.6 million members.