September 01, 2017
To Protect and Empower: LegalShield Continues Stonecipher Mission
by J.M. Emmert
Photo: Harland Stonecipher’s visions to provide middle-income Americans with easy access to legal services continues to live on today.
Headquarters: Ada, Oklahoma
Founder: Harland Stonecipher
Top Executive: CEO Jeff Bell
2016 Revenue: $450 million
Global 100 Ranking: 43
Products: Legal Services
Any great direct selling organization will tell you that the vision of its founder is the driving force behind its continued success. Think Mary Kay Ash. Or Doris Christopher. Or Rich DeVos and Jay Van Andel.
Three years after his passing, Harland C. Stonecipher’s pledge to provide middle-income Americans with a product that affords easy access to the legal system lives on in the LegalShield employees, sales associates and provider-attorneys who are passionate about helping to protect and empower consumers.
This year, the Ada, Oklahoma-based direct seller celebrates its 45th anniversary. COO Kathy Pinson, who will celebrate 38 years with the company in October, recalls that Stonecipher’s vision for the company in 1972 was not initially well received. His Sportsman Motor Club, the first iteration of the legal services provider, appeared to be impractical to many, a dubious concept that delved into an area most Americans tried to avoid—dealing with the law.
“Mr. Stonecipher had to persuade people about this company,” says Pinson. “He had to convince them this was a product that was viable, and not only did he have to convince them, he had to overcome opposition by those who thought this was not a viable way to develop legal plans. It was an entirely new concept. He had to be able to sell a concept that was not proven.”
Stonecipher persisted, and for the next 40 years he led the company through its transformative stages of dealing with traffic-ticket issues to developing its provider-attorney concept; its expansion into other states and Canadian provinces; and its trading on pink sheets, Nasdaq, American Stock Exchange and New York Stock Exchange. In 1976, Sportsman Motor Club was merged with Pre-Paid Legal Services, with the latter being the surviving corporation. In 2011, Pre-Paid Legal Services became a DBA, known today as LegalShield.
CEO Jeff Bell, who has been responsible for driving Stonecipher’s vision even further through the introduction of new technologies, says what makes everyone at LegalShield excited is the company’s purpose, which remains consistent with its history.
“LegalShield protects and empowers people,” says Bell. “We are helping citizens live free not by being afraid or ignorant of the law, but by engaging in a positive relationship with their law firm to be able to exercise all of their rights every single day. We also fully embrace the power of entrepreneurship and free enterprise. It changes the lives of millions. When someone joins as an associate, they can not only improve their own life, but they, in turn, can change the lives of tens of thousands of people in society. That’s what LegalShield is all about.”
A 45-Year-Old Startup
LegalShield calls itself a 45-year-old startup company, the reason being that the 45 years show the experience as well as the incredible scale and capability that Stonecipher built during his 40 years of leadership. “We have law firms—not a group of lawyers—in every state and Canadian province where we operate, and that simply allows us to better serve the members,” says Bell.
How LegalShield serves those members is by instilling in its members that the law is a relationship; it is not a transaction. “Most of us are raised to think of the law as a transaction—if something bad happens, we need a lawyer, and when we’re done, thank goodness it’s over,” Bell says. “We don’t view things that way. We think that you live free as a citizen by having a relationship with a law firm much like you have a relationship with your family doctor. Sometimes your doctor will refer you to a specialist. In the same way, the law firm gets to know you, and sometimes they do the work and sometimes they refer you to a specialist. Harland built that system. It’s a very high-quality system. When we say we are a 45-year-old startup, the startup part is that now we are putting tools in place to really empower that incredible capability. We put a law firm in the palm of every member’s hand.”
LegalShield does that through its mobile app. Once installed, the app allows a member to instantly contact his or her law firm with the simple push of a button, as often as they desire. Members can also use their phone’s camera to photograph speeding tickets or legal documents, such as wills, and then securely send them to the law firm.
“We are just trying to help people understand that how you live needs to be changing for the better; and that’s all better because of Harland Stonecipher,” says Bell. “And now we just put technology in place to make it a reality for more and more people.”
While the company’s most prevailing products remain its Family Legal Plan and identity theft protection product, IDShield, its recently released offerings are helping individuals take a more proactive approach with legal matters, particularly those individuals starting a new business. The intention with this approach, says Bell, is to “get people on the front foot and off the back foot.”
Last December, the company introduced Launch, a new tool aimed at providing entrepreneurs with the legal assistance they need when starting a new business. Jacob Varghese, Vice President and General Manager of Launch, sees great opportunities in this space to help bring services to small-business owners.
“We know that the small-business market is an underserved market when it comes to some of the legal needs that they have,” Varghese says. “This solution is unique because it actually puts the lawyer at the heart of the conversation. When the potential member comes in and looks to place an order for creating an LLC or corporation or DBA, the first thing they will do is have a conversation with an attorney to make sure they understand what they are doing and if this is the right structure for them.”
Another new offering is a new service for IDShield, which according to LegalShield, is the second-largest provider of identity theft protection services in the U.S. IDShield Vault, included with the parent product at no additional charge, monitors members’ activities on web browsers and mobile phones. Every time a user name or password is used, the service asks the member if they want to securely put the password into the vault. The service manages all user names and passwords as well as helps in improving the strength of passwords. It can automatically generate new passwords on a set schedule.
LegalShield also introduced IDShield Social Monitoring, which reviews members’ social media posts and sends alerts when confidential information is shared. “What we tend to advise people is you really shouldn’t tell people where you are when you post these photos, because if you are not at home, then crooks know that,” says Bell. “That is a piece of information they can use to recreate your identity and steal it.”
Bell adds that the company intends to provide additional financial monitoring for 401(k) reviews—through e-Trade, Charles Schwab, Fidelity and Vanguard—as well as a unique plan for immigration law and a national plan for a Spanish language legal practice.
An Ever-Growing Community
The innovative technology has certainly helped to grow LegalShield’s membership base, which now stands at an all-time high of 1.65 million. Ninety-two percent of the company’s business is with retail consumers, giving it one of the highest percentages of consumers in the direct selling channel.
What helps to grow that membership base are the 40,000 active LegalShield sales associates, of which 5,000 to 6,000 are full-time entrepreneurs. John Long, who worked closely with Stonecipher for many years, took over as President of Network Marketing and Sales on April 1. His No. 1 task each day is to grow the associate base. Long says he knows that his task is made easier through the company’s financial commitment to its associates as well as its philosophy of continuous improvement, which is directly responsible for the recent low churn in membership.
|LegalShield headquarters in Ada, Oklahoma.|
“We pay our associates daily,” says Long. “If you are producing, you can be paid every day of the week. We have done a lot of things corporately to help our associates from a cash flow standpoint, and we’ve gotten better and better over our history with the retention of our membership, which bodes very well for our associates. Not only do they earn money on the front end through advanced commissions, but as that membership stays on the books, they earn residual commissions. We have a good number of associates who, in our terminology, have ‘earned out’—they’ve earned back all their advances and the residual income is what they have. It’s a very good place for them to be.”
In addition, LegalShield is constantly working with its provider law firms to be sure the service levels they offer are as good as they can be. The company holds to high standards of customer service, helping to minimize the headaches associates have in the field.
“Our mandate every day is to provide more in service than we take in in revenue,” says Long. “Harland always felt very strongly that we needed to undersell and over-deliver. We needed to make sure our product was worth more than we were taking in for it. And Jeff Bell shares that same perspective and same philosophy.”
A Vision Beyond
LegalShield achieved $450 million in revenue in 2016 operating in only two markets, the United States and Canada. Looking ahead, executives are considering expansion based in part on opportunity and part on associate demand. Bell says the company is investigating a possible entry into the European marketplace, evaluating the different alternatives there.
“We also have a very consistent demand expressed by associates to go into Puerto Rico,” Bell says. “We are looking for 2018 to be a year in which we’re able to begin more international expansion.”
Next year will also begin a five-year plan in which Bell has set an objective to be a significantly larger company. “We are at 1.65 million households, and we’d love to see that number 10 times larger,” he says. “I would see us as hitting the milestone of 2 million, 4 million, 6 million and even getting close to 8 million over the next five-plus years. We believe we are getting closer and closer to the tipping point—and once we hit it, we’re very excited that it will just take off.”
Still, there remains a huge market here in the U.S. as well as in Canada, and Pinson believes there is a lot of work that can be done in these two markets. “At the same time,” she adds, “the company believes, from the top down, that this is more than just a company; it’s a mission. It’s to change the way legal services are delivered to the masses. We offer something that, regardless of the benefits to the company, to the associates, to the providers, the member still receives the biggest value of all. It’s still most meaningful for the member. Our goal is to continue to broaden our reach to give individuals access to the legal system.”
And that’s exactly what Harland Stonecipher intended when he came up with his revolutionary idea for legal services 45 years ago.