LegalShield (formerly known as Pre-Payment Law ) is an American company that sells legal services products through multi-level marketing in the United States and Canada.
The company was founded in Ada, Oklahoma on August 8, 1972 as Sportsman Motor Club. In 1976 it was incorporated as a Pre-Payment Law Service, Inc., and made its initial public offering in 1984.
Pre-Payment Legal Services, Inc. began trading on the New York Stock Exchange back to private companies in 2011 when it was acquired by MidOcean Partners for $ 650 million and later renamed to LegalShield.
Video LegalShield
Company description
LegalShield develops and markets a pre-paid legal services package through a network of over 6,900 independent provider lawyers across the US and Canada. The Company also markets an identity theft monitoring and restoration service through its partnership with Kroll Inc. Company membership plans are sold as employee benefits and directly through the multi-level marketing division.
Maps LegalShield
History
LegalShield was founded as Sportsman's Motor Club in 1972, which became known as the Pre-Payment Law Service, Inc. since 1976 until it was acquired by MidOcean Partners in 2011.
Harland Stonecipher (1938-2014) serves as the company's founding president and chief executive officer (CEO). Life insurance seller from Ada, Oklahoma, created the precursor of the Pre-Pay, "motorcycle service club", after being involved in a car crash in 1969. Although the other party was quoted in error, they filed a lawsuit against him for the accident.. Stonecipher has health insurance, life and vehicle insurance, but is required to hire a lawyer to defend himself in court and struggle to pay related legal fees. After researching Europe's industry cost plan industry, he created Sportsman Motor Club to reimburse member fees for legal fees.
Pre-paid Law began using "network marketing" (multi-level marketing or MLM) in 1983. The club changed its name and was incorporated as a Pre-Payment Law Service, Inc. in 1976, became the first company in the United States to provide pre-paid legal plans for individuals. Initially, members could choose their own lawyers and request a replacement from Pre-Payment, but in the 1980s, the company established a way to direct members who needed legal assistance to the selected companies.
The company went public in 1984. Pre-paid was first registered on NASDAQ, then moved on to the American Stock Exchange in 1986, followed by the New York Stock Exchange in 1999, listed as "PPD". In 1998 Pre-Payment acquired The People's Network, a Dallas-based marketing company.
In 2001, Attorney General Wyoming issued a press release announcing "When we found that Pre-Payments used a prohibited revenue representation to promote their multilevel marketing program, we warned them that the representation was forbidden by Wyoming law". Pre-Paid is paid $ 4,000 in lieu of civil penalties, reimbursed state fees of $ 1,000, and returns $ 2,000 to participants who claim to have been misled. That same year, the Securities and Exchange Commission required the Pre-Payments to stop counting commissions paid to sales partners as assets, rather than fees, which reduced reported earnings by more than half. Pre-Payments did not submit its financial statements for the years 2000 to February 2002. The statements showed a decrease in revenues from $ 43.6 million to $ 20.5 million and shareholder equity from $ 147 million to $ 42 million.
The Denver Business Journal reported in 2002 that Pre-Payment earned $ 27.1 million at $ 303.7 million in revenue, an increase of $ 1.9 million in earnings of $ 129.6 million in 1997, and granted members access to a network of 46 companies with 1,270 lawyers.
About 30 lawsuits by about 250 plaintiffs were filed in Alabama in 2004 against Pre-Payments. All this was dismissed or completed in 2006.
Prepaid to face two lawsuits in Mississippi in October 2004 and February 2005. The jury decided to support the company in the first lawsuit. In the second lawsuit the jury finds Pre-Paid and Stonecipher guilty of advertising fraud and fraud. In November 2005, Pre-Bayar and Stonecipher were required to pay $ 9.9 million for compensation. TheStreet.com reports that the additional Pre-Payment lawsuits filed filed by 400 Mississippi plaintiffs. This is finally resolved. TheStreet.com also notes that the company already has a number of legal successes, including the defeat of a class action lawsuit accusing the company of a pyramid scheme, as well as overturning a fraud verdict. Oklahoma Corporation and Chamber of Commerce, where Stonecipher served as director, described lawsuits against the company as "reckless" and "rude".
The Pre-Paid independent auditor could not approve the company's financial statements in 2004 because of the "material weakness" associated with commission processing. The new rules proposed by the Federal Trade Commission (FTC) require Pre-Paid to disclose to potential colleagues that less than 25 percent of its sales representatives sold some insurance plans in 2005, which the company confirmed in the US Securities and Exchange Commission (SEC). submission.
In November 2006, Pre-Payments announced plans to spend $ 27.4 million to buy back shares owned by executives.
In 2007, the FTC began investigating Pre-Pay marketing for its identity theft service and the Affirmative Defense Response System (ADRS), which the company developed to increase group sales. Pre-Payments changed its marketing materials in 2009, after regulators discovered misleading company claims regarding ADRS. According to the SEC, FTC and Pre-Pay applications "[reach] mutually agreed solutions", and in 2010 the agency ended a three-year investigation without any action. Prepayment remains the focus of an informal SEC investigation; the agency requested documentation on the company's share repurchase, consumer complaints regarding the provider's law firm, payment card compliance, Stonecipher's resignation in April 2010, and the resignation of director Tom Smith.
In January 2011, Pre-paid Legal agreed to join an entity formed by MidOcean Partners, a private equity firm headquartered in New York that it said was "focused on the mid-market." Transactions will result in the company becoming private. The deal closes on June 30, 2011. Beginning July 2011 Rip Mason serves as Chief Executive Officer of Legal Shield.
On September 10, 2011 the company announced that it would change its name to LegalShield. The new company name for the 40-year-old company was said by the company to be part of the overall re-branding initiative after the acquisition of the Pre-Payment Legal Services, Inc. by MidOcean Partners.
In July 2014 Jeff Bell was appointed Chief Executive Officer of Legal Shield to replace Rip Mason. Rip Mason takes up the position of Chairman of the Board.
References
External links
- Official website
- Prepaid Law to Join MidOcean Partners, Acquisitions for $ 650 Million in July 2011
- CBC News Report on PPL
- Pre-Paid Forgiving Guilty Decisions
- Pre-paid Legal Workforce
- Return of Attorney General's Office Nets From Multi Level Add-on
Source of the article : Wikipedia
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