Wednesday, March 1, 2017

Is LegalShield really all that legal? (full review)

LegalShield was once a big, bad, publicly-traded company on the New York Stock Exchange…until they went private faster than a celebrity in rehab.

Judging from some of their past scandals and legal troubles, going private was definitely a smart move. Have I been involved?

This video explains everything:

Make sense? Either way, here’s the full review on LegalShield.


LegalShield was founded in 1972 under the name Sportsman’s Motor Club in Ada, Oklahoma. A couple years later, they changed their name to Pre-Paid Legal and went public, selling its shares on the New York Stock Exchange.

In 2011, the company was acquired by MidOcean Partners, a private equity firm worth $3.5 billion, for $650 million. They then went private and changed their name to LegalShield. In 2011, before they went private, they were raking in an annual revenue of $461 million. [1]

Back in 2001, they were hit twice by the law – first by the state of Wyoming for misrepresenting distributor earnings, and again by the SEC for counting commissions as assets to inflate their stock prices. They also faced legal troubls in Missouri that year. [2] [3]

In 2009, they were subpoenaed by the SEC for various documents which were never sent over to the SEC despite multiple demands. After that, the FTC filed a complaint against LegalShield for multiple violations, including misleading representations. [4] [5] [6]

Jeff Bell is LegalShield’s new CEO, and this guy is no joke.

Bell got his MBA from none other than the Wharton School of Business back in 1989). He’s worked in key positions at Ford Motors, Chrysler, NBCUniversal, Advertising Age, where he won them their first-ever Online Marketer of the Year award in 2005, and Microsoft, where he oversaw the launch of Halo 3, among other major releases, as Vice President of Global. [7] [8]

He’s got decades of experience in marketing and advertising at some of the world’s biggest corporations, and he was named as LegalShield’s new leader in 2014. [9]

Hopefully he can replicate his success in the world of multi-level marketing. This will be his first MLM, but maybe that’s a good thing. Maybe his credentials can fend off the FTC.

So maybe he can turn their rep around. However, in March of 2016, he made the decision to leave the Direct Selling Association, the regulatory body that pretty much ensures that an MLM is at least semi-legit.

Bell claims their decision to leave the DSA is because the DSA actually isn’t enforcing its own Code of Ethics against other MLMs who are clearly breaking it, and thus is weakening the direct selling industry as a whole. Wouldn’t be the first time. [10]

As of January this year, LegalShield membership is supposedly at an all time high – 1,612,183 members. They claim to have added half a million members in 2016 alone. I smell a comeback.

How much does LegalShield cost?
At the time of writing this, it costs $149 for a New Associate Kit, which includes online training, materials, sponsor support, a back office, and a few other perks.


LegalShield sells legal services, in case their name didn’t tip you off. They claim to offer direct and affordable access to law firms.

They have a network of almost 7,000 independent attorneys throughout the United States and Canada who offer these services. For your monthly membership fee, which varies by state but usually comes out to just under $20/month, you get:

Legal Advice: If you ever need advice or consultation from a legal representative, you always have one at your service.

Legal Representation: In the case that you should need legal representation, you have their independent attorneys at your disposal.

Automotive Defense: Accident defense and moving violation assistance.

Familial and IRS Legal Services: This covers everything from divorce and name changes to IRS audits.

Considering legal advice can cost hundreds, and representation from an attorney can cost anywhere from $150-$500 per hour, it’s not a bad deal.

The company also now sells identity theft protection services starting at $14.95/month. The basic plan cover you and a spouse, and includes:

  • Credit report and credit score analysis
  • Credit restoration
  • Unlimited ID theft consultations
  • Minor protection
  • Credit monitoring and alerts

Honestly, if you have even a halfway decent bank or own a credit card, you probably already have access to all of these services for free.


You’re selling a monthly membership, and when you get a new customer, LegalShield pays you an advance for a year’s worth of that customer’s membership. Sounds great, right? Yeah, until that customer decides to cancel, and you have to pay back a huge chunk of that advance.

The compensation plan is nowhere to be found on their website, and the information you can find is very vague. It doesn’t list any specific commission rates.

There are four ways to earn:

  1. Personal Sales

You make a percentage on each membership you sell, which varies by rank. This is roughly what you can make, according to rank:

Junior Associate: Up to 50%

Associate: Up to $75 on each sale

Senior Associate: Up to $100 on each sale

Manager: Up to $125 on each sale

Director: Up to $150 on each sale

Executive Director: Up to $182.50 on each sale

These numbers look generous, but remember, they are advances on 12 months of membership payments. Also, it’s very, very difficult to move up even past Junior Associate, let alone all the way to director levels.

  1. Build a Team

Team commission are offered in the form of bonuses for every membership they sell. Exact numbers are not specified.

  1. Residual Income

After a membership that you’ve sold lasts a year, you make a monthly commission on each month they stay active. Whether or not this commission is the same as before isn’t stated, but this is basically number one rehashed.

  1. Performance Club

Each time you sell memberships and recruit new associates, you earn points. If you earn enough (fat chance), you can start earning cash bonuses and prizes.


The company is not without their scandals. They’ve got a pretty colorful history, to say the least.

However, it seems that the worst might be over for them. They’ve survived dozens of legal battles, and since going private, they’ve yet to encounter one. They also elected a rock star CEO, and I would be shocked if he didn’t do good things for the company.

That being said, the commission plan is vague, at best. It’s really not clear how much money you’d make as an associate. One thing that is clear – you’re probably not getting rich here.

But if you like automated ways to build passive income, there are better ways.

(and you can trash those old MLM habits, too)


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