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March 01, 2012

Company Spotlight

LegalShield: Expanding Justice for All

by Barbara Seale


Click here to order the Direct Selling News issue in which this article appeared.


LegalShield

Company Profile

  • Founded: 1972
  • Headquarters: Ada, Okla., with executive offices in Dallas
  • CEO: Rip Mason
  • Products: Legal Expense Plans, Identity Theft Plans

After 40 years in business, one of direct selling’s most unique and proven companies is quickly becoming an even better version of itself.

Last year Pre-Paid Legal Services was acquired by private equity firm MidOcean Partners. During the acquisition process, MidOcean’s management was impressed by Pre-Paid Legal’s unique service offering, value proposition and strong cash flow. In addition, the company’s home-office systems were robust and scalable, and its stable group of field leaders was genuinely outstanding.

MidOcean saw the opportunity to add executive management, marketing and branding expertise to Pre-Paid Legal’s already-strong management team with a view toward reaching even more people. Their only question was the company’s brand, especially its name. Did the name Pre-Paid Legal Services do justice to the company’s potential? That question launched a process that resulted in a new company name that was at once familiar and also exciting: LegalShield.

Under its new name LegalShield, the company’s growing legion of sales associates continues to offer legal expense plans to consumers—members, in company parlance. The plans operate like medical insurance policies or HMOs, giving members direct toll-free access to carefully selected provider law firms.

Plans cover the whole family for a modest monthly cost, relieving the stress of finding an attorney to do such common things as develop a will, handle a divorce or represent the member during a tax audit. Some 60 percent of family policy members also purchase Identity Theft ShieldSM, which protects them in the event they are victims of the fastest-growing crime in America. In the event of an ID theft issue, LegalShield’s investigators remediate the credit issue, potentially saving members hundreds of hours of time.

LegalShield has around 1.4 million family memberships, covering approximately 4 million individuals in 49 states and four Canadian provinces. LegalShield connects 2.2 million calls to provider attorneys a year.


LegalShield has around 1.4 million family memberships, covering approximately 4 million individuals in 49 states and four Canadian provinces.


MidOcean had considered investing in network marketing companies in the past, but as they had no direct sellers in their portfolio, their expertise was limited. They turned to their operating affiliate Rip Mason to help them evaluate the company. Mason’s relationship with MidOcean began in 2002, when the company considered acquiring JAFRA Cosmetics, where Mason was an executive. Together, Mason and MidOcean saw tremendous opportunity at Pre-Paid Legal. Once the acquisition was final, Mason became the company’s CEO. He says the company’s mission was as attractive to him as its business potential.

“What’s really important to me, personally and professionally, is that this business—for the first time in the history of this country—is allowing equal justice and representation to everyone,” he says. “That really resonates with me. We’re doing something we’re very proud of. We’re fulfilling the principles of the founding documents of this country.”


“What’s really important to me, personally and professionally, is that this business—for the first time in the history of this country—is allowing equal justice and representation to everyone.”
—Rip Mason, CEO


The Challenges of a Name Change

Rip Mason
Rip Mason
Alan Fearnley
Alan Fearnley

Early on, the new owners did consumer research on the company’s image. Chief Commercial Officer and President Alan Fearnley led the effort. He explains that when a company sells an intangible service, the name has to be a workhorse. It must portray the company, but it also must convey the value of the service.

“In direct selling once you get to know a company, you look at the brand name and quickly become familiar with it. If you join it, within a few days a name that might have seemed strange at first seems just fine. When we started researching the brand name, we talked with people who had never heard of the company,” Fearnley reports. “In the focus groups, the initial impressions weren’t as strong as they could be, which led us to consider the name change.”

Focus groups said that the name Pre-Paid Legal described the service perfectly, but the impression the name gave didn’t match the tremendous value of the service. Consumers tended to mentally group it with other products and services that might be used in “down market” situations—pre-paid cellphones, pre-paid phone cards or pre-paid credit or debit cards.

“The name made people feel something about the product that didn’t exist,” Fearnley notes. “Our company offers very high-quality delivery of legal services. Our lawyers are already paid and ready to serve you, which increases the quality of our product. But when we investigated the name, it didn’t match the perception of the quality of the service. So we had to ask ourselves, is there a name issue?”

With years of marketing and direct selling experience, Mason and Fearnley understood the delicacy of any name change, especially following an acquisition. After all, the company’s sales associates were proud of the Pre-Paid Legal name. They were familiar with it, loyal to it and understood the excellent quality of the services they represented. The name LegalShield was among about 150 that focus groups reviewed. Its advantage: It was already familiar to associates.

“LegalShield had been a premium product we offered that gave members immediate access to attorneys 24/7,” Fearnley says. “When we asked consumers whether it better described our company, the name came up very strong. More important, it didn’t have the negatives.”

Seal of Sales Approval

The most positive reaction, of course, had to come from the field. Fearnley had allowed a few select field leaders to view the focus groups or to know about some part of the process. But the final name selection was a closely guarded secret. In September 2011 Pre-Paid Legal held its last field sales conference under that name. Fearnley gave a 30-minute presentation and video on the process, unveiling the company’s new name at the end. Associates responded with thunderous approval.

“I never saw such a reaction to anything I’ve ever presented,” Fearnley recalls. “The place exploded! People were standing, clapping and screaming for several minutes. It was very emotional. What we showed them was what they identified with. We didn’t change the company. We just expressed it better than we did before. And isn’t it easier to sell a Ferrari if it looks like a Ferrari? The name now matches what we’re selling.”


“We didn’t change the company. We just expressed it better than we did before. … The name now matches what we’re selling.”
—Alan Fearnley, Chief Commercial Officer and President


Fearnley describes the implementation of the brand as an ongoing process, but the change has seemed to increase certainty and clarity in the field about the company’s direction.

“It has had the effect of showing a clear strategic intent about who we are as a company and where we fit in the universe. Productivity per associate has been improving since we implemented it,” he says.

The new branding adds fuel to the foundation that had been built over 40 years. Executives are adding their own sweat equity. Mason says they’re glad to make the investment. You have to build trust before you can build momentum, he notes.

“I spent every weekend in 2011 on the road at meetings around North America, talking about our vision and where we saw the company heading,” Mason says. “We focused a lot on the unique value proposition of the product. We also spent a lot of time educating our associate base on the fact that their commissions were directly related to additional membership sales and the retention of those memberships. At the same time, we also encouraged recruitment of new associates. Our leaders—who are the finest I’ve ever worked with in direct selling anywhere—understood that, seized it and ran with it. They drove the message down into the field. That repositioning directly resulted in significant productivity, and productivity continues to rise for us. Productivity is up more than 33 percent over last year.”


“Productivity is up more than 33 percent over last year.”
—Rip Mason



Best Foot Forward


Seeking Justice

LegalShield was founded by accident. Literally.

In 1969 Harland Stonecipher was involved in a head-on auto collision. Though the accident was not his fault, he was sued. He won the lawsuit, but not before he faced thousands of dollars in legal fees. The experience shook his idealistic beliefs about justice. But it caused the life insurance salesman to begin thinking about how others could be protected from the nightmare he endured.

By 1972 he had created Pre-Paid Legal’s predecessor company, which incorporated as Pre-Paid Legal Services Inc. in 1976. Six years later Stonecipher’s old friend John Hail introduced him to the concept of offering his legal services memberships through network marketing. The idea seemed sound, and Stonecipher implemented it. By June 2011 Pre-Paid Legal Services was ranked No. 28 on the Direct Selling News Global 100 list of the top companies, with 2010 revenues of $454 million, produced by those direct selling entrepreneurs that Hail had recommended—425,000 of them. Finally, justice was served.


New associates benefit from the new initiatives Mason brought into the company as well. In addition to new branding, the company upgraded its already-strong training to represent industry best practices, developed new training and collateral materials and produced all-new materials for members.

Training is key at LegalShield. Its product is unique, so the company makes sure to equip all its associates with top-notch information and training. When new associates first join LegalShield they begin their first 48 hours with a program called First Step, which is designed to maintain the momentum of their initial decision. Then as soon as possible, they enroll in a live four-hour Basic Training program, which is often held in conjunction with additional events. Basic Training is a rigorous review of LegalShield services, its value proposition and the associate recruitment opportunity.

“When they leave, they understand at a deep level how our services work, what services are covered and not covered by the family plan and also the benefit of recruiting other associates—how the MLM compensation plan works,” Mason says.

Local weekly events, Super Saturday gatherings and leadership calls also include training, refreshers, best practices and recognition. Mason and other top executives often attend. And web-based information and training is available 24/7. The carefully orchestrated collection from communications and training prepares associates to succeed.

Fast Results

Mason believes that the synergy they spurred will fuel continued growth. He is especially enthusiastic about LegalShield’s affiliation with another familiar name: CareerBuilder.com. The website is the largest job-placement site in the United States, with 35 million members and 25 million unique viewers each month. LegalShield is now its legal resource center and the company’s banner ad appears on the site’s home page as part of a test LegalShield is running.

“We expect to recruit a significant number of new associates from this alliance,” Mason predicts. LegalShield has come up with an ingenious way to leverage the CareerBuilder relationship and create a subtle but powerful incentive for top producers and, importantly, for up-and-comers. “One of our most important denominations for our successful leaders is something we call the Player’s Club. It requires month on month consistent production and recruitment. Those Player’s Club-qualified associates will be receiving all the associate leads that arise through CareerBuilder.”


LegalShield is now the legal resource center for CareerBuilder.com, the largest job-placement site in the United States, with 35 million members and 25 million unique viewers each month.


LegalShield will sort the associate leads by ZIP code and direct them to its best, most dedicated field leaders. It pays all upfront expenses for the project. In addition to CareerBuilder, LegalShield is considering other media advertising. Plans were still being developed at press time.

The new efforts are already yielding results in every category. Not only is associate productivity on the rise, but retention has increased significantly, Mason reports. The company swapped its earlier promotional activities in favor of activities that focus on branding, value proposition and the stability of the associates’ commission stream.

“We’re focusing on those key elements to avoid reactive behaviors,” Mason says. “That has led to a more predictable base, which positions us well for our growth and development.”

The company also added executive offices in Dallas in order to increase productive travel time. Its Ada, Okla., headquarters is three hours north of Dallas—where executives fly out of DFW Airport to events across North America. The new executive offices are now only 20 minutes from the airport. The Dallas location has also provided access to specialized marketing and sales support talent. Several key managers have relocated from Ada to Dallas, but Ada still remains the company’s headquarters and the home of about 650 employees. Many of them have been with the company for two or more decades.

All the new actions have updated the structure and foundation of the 40-year-old company. While LegalShield is already seeing remarkable results after only a few months, Mason’s goal is to keep the fire burning for years to come.

“I’d like to create a much larger awareness in the United States and Canada of our products and services,” he concludes. “We can only expand this membership opportunity if we have vast numbers of well-trained associates to pass it on. The network model is the best model to get the word out and proliferate the brand and service opportunity. We owe it to the field to give exposure to our brand and membership opportunity so that people are aware that it exists. That’s our key obligation.”