PrePaid Legal (now LegalShield aka Legal Shield) Info
LegalShield/Legal Shield (formerly Pre-Paid Legal)
What’s been traditionally known as Pre-Paid Legal is now known as LegalShield. According to a LegalShield press release, the name change is part of a branding initiative. Mid Ocean partners (who acquired Pre-Paid Legal and took it private) believes there is untapped room for future growth.
Pros of switching to LegalShield
Bad Branding is gone: Rightly or wrongly, the Pre-Paid Legal brand has suffered from a lot of negative press and to many, it has become associated with the lawsuits and accusations of an illegal pyramid scheme. Justified or not, they have left the name Pre-Paid Legal with a negative impression in the minds of some. The name LegalShield is fresh and perhaps a better choice. Whereas “Pre-Paid Legal” highlighted the payment portion and perhaps too closely resembled things like “Pre-Paid Cell phones” which don’t necessarily have a favorable impression to some, the very name “LegalShield” carries with it, a connotation of security.
Less Transparency: Being privately owned, LegalShield will not require the same level of transparency it once did. No longer will the company be mired in SEC investigations over what many consider to be questionable (though probably not uncommon) accounting practices. Being publicly traded may have added a layer of scrutiny that hindered business practices associated with multi-level marketing.
Cons of switching to LegalShield
NYSE status gone: Being privately owned, LegalShield will not be able to boast an NYSE listing. This was one of the strengths Pre-Paid Legal boasted. One of the many (and perhaps best) arguments came in the form of this rhetorical question: If Pre-Paid Legal is a scam (or at least, not legitimate), why and why is it listed on the NYSE?
Short-Selling scapegoats gone: Being owned by a private equity firm, LegalShield doesn’t have to worry about short-sellers trying to drive down its stock price. Of course, what this also means is that LegalShield won’t have short-sellers as a scapegoat.
LegalShield moving forward
It will be interesting to see how this all plays out. Will LegalShield’s recruiting practices remain similar to Pre-Paid Legal’s? Will its marketing be as heavily dependent on its associates or will it find less controversial ways of marketing its product? . Will its retention rates be any better? Of course, being private means we likely won’t be privy to things like membership retention rates. However, according to the Legal Shield website, its plans protect 1.4 million families. This would appear to suggest that active memberships have continued their decline (though perhaps at a slower pace).
LegalShield (sometimes referred to as “Legal Shield”) is formerly known as Pre-Paid Legal Services, Inc.. Originally founded in 1972, Pre-Paid Legal Services, Inc. became LegalShield in 2011 after being purchased by Mid Ocean Partners, a New York-based private equity firm. Now privately owned, it is no longer listed in the NYSE as it was when it was publicly traded. LegalSield is headquartered in Ada, Oklahoma. Through a network of provider law firms across 49 states, Legal Shield offers pre-paid legal service plans covering various family matters (divorce, adoption, child custody), automotive situations, estate problems, as well as financial and home situations. Like its Pre-Paid Legal predecessor, Legal Shield markets its services through multi-level marketing