March 02, 2015
Equal Access, Equal Adaptability: LegalShield’s Moral Imperative to Grow
by Beth Douglass Silcox
Headquarters: Ada, Oklahoma with Executive Offices in Dallas, Texas
Executives: Jeff Bell, CEO; Kathy Pinson, COO; Steve Williamson, CFO; Alan Fearnley, President of Consumer Marketing and Brand and Chief Commercial Officer; James Rosseau, President of LegalShield Business Solutions; and Darnell Self, Executive Vice President of Network and Business Development.
Product Categories: Legal and Identity Theft Services for individuals, families, and businesses
|Kathy Pinson||Steve Williamson||Alan Fearnley||James Rosseau||Darnell Self|
When LegalShield brought on a new CEO with consumer marketing and corporate leadership credentials the likes of Microsoft, Chrysler, Ford and NBCUniversal last summer, they once again affirmed the company’s adaptable nature. This pioneering, service-focused direct selling company has a long history in meeting the changing needs of the consumer marketplace with innovations like 24/7 legal counsel and identity theft protection, as well as rising to broader corporate and industry challenges.
CEO Jeff Bell’s goal, as he sees it, is to make LegalShield a household name, much like direct selling giants Mary Kay, Avon and Tupperware did for their product categories. Admittedly, skincare, cosmetics and food storage are more easily understood concepts than the disruptive business model that powers LegalShield’s mission of equal access to equal justice for all, but Bell and his team aim to change that. In fact, he says, “I believe our growth is not just a business imperative, it’s also a moral imperative.”
Today, the 43-year-old company offers individual and family pre-paid legal and identity theft plans, as well as products for home businesses, small businesses up to 100 employees, and larger companies that elect to provide a LegalShield option within employee benefits packages. LegalShield’s memberships number 1.4 million covering 3.7 million lives, and its call center fielded 2 million member calls for legal assistance in 2014.
One Car Accident Away
LegalShield, originally incorporated as Pre-Paid Legal, arose from the rolling hills of Ada, Oklahoma, following Founder Harland Stonecipher’s head-on automobile collision in 1969. Despite insurance coverage for life, auto, and health, life insurance agent Stonecipher realized his family’s vulnerability to unexpected legal fees after being sued for an accident that was not his fault.
As he recovered, Stonecipher mulled over the fate of his family and the hundreds of thousands of other families who could fall into this gap at a moment’s notice. Surely something existed to provide assurance to everyday people needing legal counsel, but research proved otherwise.
So in 1972, he forged ahead on his own from a one-room office in a local mini-mall. Within seven years, the company offered connectivity to legal services in six states, and by 1982 had become the conduit between a membership network of people who needed access to legal help and an attorney provider base that could deliver it. COO Kathy Pinson, who has spent 35 years with the company, says, “The provider attorney system is our key competitive advantage today.”
LegalShield’s provider attorney system hinges on extensive vetting and long-term contracting with a single, large and established law firm within each U.S. state and Canadian province in which they do business. Average length of service for a LegalShield firm is 14 years with attorney experience levels averaging 20 years.
Because that firm represents all LegalShield members in that state or province, LegalShield’s business can comprise a big part of the firm’s overall business. According to Alan Fearnley, President of Consumer Marketing and Brand, this creates a scenario whereby attorneys become “almost evangelical” in their support of the business model, which in turn generates fantastic customer support for members, assures LegalShield members receive legal guidance from experienced professionals, and establishes vital connectivity between law firms and the field, which makes LegalShield’s various services easier to sell.
“The very way that we’re set up allows us to have additional quality measures over those attorneys that no one else has,” Pinson says.
LegalShield quantifies member experiences with attorney providers, effectively putting a number to their “bedside manner” and holds lawyers accountable for the service they render. LegalShield has experienced a considerable rise in their Net Promoter Score® (NPS), a customer loyalty scale used to measure overall satisfaction with a brand or product. The scale ranges from -100 (everyone is a detractor of the company or product) to +100 (everyone is a supporter of the brand or product). Attained by survey, any score above zero is somewhat positive; a score of 50+ is excellent. Fearnley happily reports that Legalshield’s score, which ranged in the mid-40s a few years ago, now stand at 57. He says, “By allowing attorneys to see that score and by training around it, our service levels are really terrific and that’s helped the quality of the business.”
From the view of LegalShield’s associate field, where Darnell Self, Executive Vice President of Network and Business Development, spent 15 years, the attorney provider network is something competitors just don’t have. Decades in the making, the time and resources necessary to put the right law firms and communications in place, Self says, makes it unlikely to be duplicated. That’s a highly sought after attribute for those seeking direct selling opportunities.
A Mission for All
“We deliver products that promote peace of mind,” Bell says. “We believe that our mission applies both to our members and our sales associates. We want to improve their lives by teaching them life-transforming skills, giving them peace of mind and confidence in a world oftentimes uncaring and selfish.”
In fact, Harland and Shirley Stonecipher’s founding mission centered on equal access to justice for all people. “That doesn’t mean that we’re here to guarantee that people who break the law aren’t held accountable—far from it. We just want to make sure that every citizen in every community in the United States is able to exercise their rights of living under the law, that they are able to have representation in all circumstances and that it is not only available to those with higher incomes,” Bell says.
Leveling the legal playing field, righting the wrongs that exist in North America, providing equity where there is inequity—those messages resonate with everyone associated with LegalShield. “It’s an entire eco-system that we have. Whether it’s the employees, the members, the associates or the provider attorneys, they are all very passionate about that cause,” Chief Financial Officer Steve Williamson says.
Congregating that shared passion is a huge part of LegalShield’s business strategy, which is driven by intimate gatherings of 20, galvanizing affairs numbering 15,000 and everything in between.
“I can’t tell you what the next product’s going to look like. I can’t tell you what’s going to be half price next week. But what I have is a passion and conviction for what we are doing and for people who feel the same way. People need to be there because they want to renew their vows and see people who are involved in the cause,” Fearnley says.
It was a Las Vegas event last summer that convinced Bell to venture into this, his first foray into the direct selling industry. He was very, very moved to hear the testimonies from lawyers who worked on behalf of members who faced criminal warrants or warrants for money they didn’t owe, as well as from people whose identities were stolen and reclaimed through the investigative efforts of LegalShield’s Identity Theft partnership with Kroll.
“With this particular initiative, because of the very nature of our mission, this is a chance for people to work hard, but also to feel like they are making a contribution,” Bell says. “I believe this is bigger than me. I think this is bigger than any selling associate or any individual or entrepreneur who decides to take up a LegalShield business opportunity.”
Changing of the Guard
Bell’s words reflect Stonecipher’s principles when he founded Pre-Paid Legal, originally named the Sportsman’s Motor Club, in 1972. In 1976, the company changed its name and incorporated as Pre-Paid Legal Services, Inc. The next evolution was a public offering in 1984. Stonecipher served as CEO until 2010.
In 2011, a change in corporate leadership and a transition back to private hands occurred when MidOcean Partners, a New York-based private equity firm, purchased the company for $650 million. Later that year, the company refreshed its brand and took the name of one of its most popular products—LegalShield.
In the end, Bell says, “We went private because private equity was looking to invest. Quite frankly, the business is phenomenally robust. This business generates a lot of cash and has one thing that they really want, which is the opportunity to grow.” That growth potential is eventually what brought Bell into the fold in 2014.
Today, LegalShield’s associate field consistently reflects a simple set of values that threads throughout the entire organization: Believe in the good in all people; do the right thing when no one is looking; give clarity to everybody’s purpose; and empower people’s passions. And Bell says, “We’re growing our associate base for the first time in several years, and we’re doing it for the right reasons and with the right people.”
Adaptable Sales Opportunity
LegalShield is not a hobbyist direct selling opportunity. “You really join the company to learn the skills, to network with other people, and to interact and to sell to other people,” Fearnley says.
LegalShield’s associate demographic skews a bit older, yet is gender-balanced. Associates tend to be business-oriented people like insurance brokers, sales professionals who have built networks before, those looking for a second career to transition into retirement, and even retired attorneys who understand the need for and value of LegalShield’s products.
“When people have got something to lose, then that’s when they want to protect it,” Fearnley says. It’s also when they want to share it with others, and LegalShield offers an adaptable business opportunity depending upon associate needs and goals. “We want them to operate our business in any way that’s a potential opportunity,” he says.
The intangible nature of LegalShield’s products and the varied audiences to whom associates must sell, however, present a specific training challenge. “We’re not training people how to demonstrate products. I can’t let people feel the texture of something. So it’s really important to get people talking and sharing and going about it in a way that normal sales people talk about things. In other words, relationships and good, essential selling,” Fearnley says.
Basic associate training includes online coursework and live training with interaction and role-playing, and then LegalShield scales it up at larger events where top income earners and rising stars inspire associates looking for more. “They should come out better than when they arrived. They’re more equipped for the world in general. You don’t just sell our products, you pick up selling skills,” Fearnley says.
While some LegalShield members enroll and earn money by selling memberships without any intention of recruiting or building an organization, others enter into the business with networking as a focus, and some eventually matriculate to LegalShield Business Solutions sales.
James Rosseau, President of LegalShield Business Solutions, says before associates can graduate to new levels of LegalShield sales, deeper levels of training for not only product sales but also business-to-business sales, and the intricacies involved, are required.
Rosseau’s business sector offers a lucrative space in which to grow LegalShield’s overall business. “Today, only about 6% of employers offer legal plans as part of voluntary benefits packages, so we have a lot of upside opportunity,” he says. Some 47,000 small businesses used LegalShield services in 2014, and 34,000 larger companies offered LegalShield legal and identity theft plans to their employees. This segment represents roughly 30 percent of the company’s overall business, which was estimated at $400 million last year.
The Way Forward
Making an intangible service more tangible to consumers was an ongoing dilemma for LegalShield until the simple click of a mobile app opened the door to adaptability once again. “You push a button and up pops a screen. You can do one of four things: call your law firm, call your identity theft/credit advisor, call member services, or 24/7, 365 days a year push the red button if you’re being arrested or have a crisis. We’ll get a lawyer on the phone in 15 minutes,” Bell says. “Nobody in this business makes that promise.”
Fearnley adds, “New technology is going to make this product shine even more brightly than ever before. Believe me, it’s no secret that we’re going after that technology in terms of support and the opportunity and the dollars. The brighter that technology shines and the brighter that product shines, the brighter that opportunity shines.”