Sportsman's Motor Club LegalShield started as Sportsman's Motor Club in 1972 in
Ada, Oklahoma. Harland Stonecipher (1938–2014) was the company's founding president and
chief executive officer (CEO). The
life insurance salesman from Ada created the motor club after being in a car accident in 1969. The other party in the crash was cited for fault but still
filed suit against Stonecipher for the accident. Although he had
health, life, and
vehicle insurance coverage, he was required to hire a lawyer to defend himself in court and struggled to pay the legal expenses. After researching the industry of European legal expense plans, he established the Sportsman's Motor Club to reimburse members for legal fees relating to vehicle accidents.
Pre-Paid Legal Services The club changed its name and incorporated as Pre-Paid Legal Services, Inc. in 1976, becoming the first company in the United States to provide pre-paid legal plans for individuals. The company was first listed on the
NASDAQ, then moved to the
American Stock Exchange in 1986, followed by the
New York Stock Exchange in 1999, where it was listed as
PPD. In 1998 Pre-Paid acquired The People's Network, a
marketing company based in
Dallas. In 1999 the company began offering plans in Canada, with some modifications to suit the
Canadian legal system. By 2009, it covered 28,000 Canadian families across four
provinces. In 2000 Pre-Paid Legal was criticised by
CBC Television's
Marketplace for operating as a
multi-level marketing model and encouraging sales associates to buy training material. In 2003, the company moved into a new corporate headquarters in Ada, Oklahoma. In the same year, the
U.S. Securities and Exchange Commission (SEC) required the company to stop counting the
commissions paid out to sales associates as
assets instead of
expenses, which reduced reported
earnings by over half. Later that year, however, the
Denver Business Journal reported that Pre-Paid earned a $27.1 million profit on $303.7 million in revenue, a large increase from its $1.9 million profit on revenues of $129.6 million in 1997, and its members had access to a network of 46 firms with 1,270 lawyers. In 2004, approximately 250 plaintiffs filed about 30 lawsuits in
Alabama against Pre-Paid, all of which were dismissed or settled by 2006.
TheStreet reported that Pre-Paid faced additional lawsuits filed by 400 Mississippi plaintiffs which were ultimately settled. Pre-Paid's
independent auditor was unable to approve the company's 2004 financial statements because of "material weaknesses" related to the processing of commissions. New rules proposed by the
Federal Trade Commission (FTC) required Pre-Paid to disclose to potential associates that less than 25 percent of its sales representatives sold multiple insurance plans in 2005, which the company confirmed in an SEC filing. Pre-Paid changed its marketing materials in 2009 after regulators found the company's claims about ADRS misleading. According to an SEC filing, the FTC and Pre-Paid "[reached] a mutually agreeable solution", and in 2010 the agency ended its three-year investigation without any action.
LegalShield In January 2011, Pre-Paid agreed to be bought out for $650 million with entities formed by
MidOcean Partners, a New York
private equity firm that describes itself as "focused on the
middle market". The deal closed on June 30, 2011, and the company once again became privately held. In July 2011, Rip Mason began serving as LegalShield's CEO. In late 2011, the company changed its name to LegalShield as part of an overall re-branding initiative. In July 2014,
Jeff Bell replaced Mason as CEO, and Mason became chairman of the board. Bell retired in 2022. Stone Point Capital, another private equity firm, purchased a
majority stake in LegalShield from MidOcean Partners in 2018. In 2019, the company expanded into the UK with offices in
Oxford and an arrangement with
Slater & Gordon UK providing
legal advice via the LegalDefence app. The UK venture went into
liquidation in May 2021. ==References==