Is LegalShield a Pyramid Scheme?

Is LegalShield a Pyramid Scheme? – Can You Make Money Selling Legal Services as an MLM Rep?

Hey, and welcome to my LegalShield MLM Review! If you have landed on this page through Google, most probably you are doing your research on this company. Maybe you wonder if LegalShield services worth the money, or somebody introduced you to their business opportunity saying you can make a lot of money with them. Whatever your reason is, I bet the most important question for you right now is: Is LegalShield a Pyramid Scheme?

I have spent long hours to fully research this company so you don’t need to endlessly browse the internet trying to get together all pieces of the puzzle.

In this article, I’ll go through every detail about the LegalShield company to help you decide if this is a bargain or another pyramid scheme.  

Without further ado, let’s get right into the facts right now!


LegalShield OverviewIs LegalShield a Pyramid Scheme? - The Logo

Full Name: LegalShield

Type: MLM Business Opportunity

LegalShield Website: https://www.legalshield.com/

Founder: Harland Stonecipher

Year of Establishment: 1972

Price to Join: $99

Recommended? No


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What is LegalShield?

Based in Ada, Oklahoma, United States, LegalShield is a multi-level marketing company, often referred to as network marketing, referral marketing, or direct selling company.

They were formerly called Pre-Paid Legal but later on, they switched to LegalShield.

The company has even been publicly-traded on New Your Exchange Stock Market but returned to the private ownership when they’ve decided to merge with MidOcean Partners in 2011.

LegalShield is selling pre-paid online legal services through a network of distributors.

Here’s a short introductory video of what is LegalShield in a nutshell:

 


Who is the Founder?Is LegalShield a Pyramid Scheme? - The Founder

Harland Stonecipher founded LegalShield as Sportsman’s Motor Club in 1972 after he had an automobile accident in 1969.

Prior to that, he has had a brief career as a school teacher and debate coach, which he left for becoming a life insurance agent.

Basically, the car accident happened while Harland was on a sales trip, and ultimately, this story led Harland to establish his own company with the goal to give people the opportunity to have access to professional legal services that wouldn’t cost them an arm and a leg.

Harland wasn’t at fault for that accident and the other party in the crash was cited for fault but still filed suit against Stonecipher for the accident.

Although Harland 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.


What is LegalShield’s Financial Situation?

It seems like LegalShield is periodically experiencing ups and downs in their operations.

If we take a look at their financial indicators, we can easily see that their revenue decreased in 2016 by $11 million in comparison with 2015.

Then, throughout the years 2017 and 2018, their revenue grew up by $7 million, and $3 million, respectively.

As of 2019, there were no more ups or downs, their revenue remained at the same level as in 2018. 

 

Is LegalShield a Pyramid Scheme? - Financial Situation

 

Even though there have been some fluctuations, still they aren’t that significant as, for example, in Zija International MLM.


What Are LegalShield’s Products?

LegalShield is aiming to offer affordable legal access for all people.

For that matter, they are working with 39 law firms and covers almost any legal issues you may have in your life.

They have plans for individuals and families as well as for business, and even emergency situations. The services included in each plan may vary but here’s what legal services are covered in a standard legal plan:

  • advice on unlimited issues
  • attorney letters or calls made on your behalf
  • contract and document review (up to 15 pages each)
  • and more.

 

Is LegalShield a Pyramid Scheme? - Personal Legal Plan

 

For a small monthly fee, your customers can have a worry-free life as they’ll get an attorney taking care of all their legal issues, including even pre-existing issues.

LegalShield’s products are legal services, and basically this is for what you are going to get paid to promote if you get involved in this LegalShield business.

Every time you sell LegalShield services or bring someone into this business, again, to sell LegalShield services, you’ll earn a commission.


Are LegalShield Products Worth Their Price?

LegalShield services have reasonable prices starting from $25 per month for the Personal Legal Plan and $39 per month for the Small Business Legal Plan.

 

Is LegalShield a Pyramid Scheme? - Pricing

 

 

This could serve as a competitive advantage taking into consideration that most lawyers out there charge around $200 per hour.

Amongst people who are already using LegalShield services, there are both satisfied and unsatisfied customers.

As of the date of this writing, LegalShield received 3,3 stars rating on Consumer Affairs, which is not bad but at the same time, not that good.

Also, the LegalShield business received 188 consumer complaints in the last three years on BBB (Better Business Bureau).

Amongst those, only 73 were closed in the last 12 months, which means they could also work better on their customer service.

Here is a screenshot I have taken about what the most unsatisfied LegalShield customers are saying:

 

Is LegalShield a Pyramid Scheme? - Unsatisfied Customers on BBB

There’s no guarantee that this kind of situation will not happen to you or your customers.

So, before deciding to join LegalShield business opportunity, you’ll have to think about if you can 100% stand behind LegalShield services.


How Much Does it Cost to Join LegalShield?

LegalShield calls its members Associates and in order to become one, you’ll need to purchase a Starter kit that costs $99.

 

Is LegalShield a Pyramid Scheme? - Starter Kit Price

 

 

It includes training, promotional materials, your back office, and sponsor support.

Depending on where you live, you may also be required to pay a licensing fee, which normally has to be renewed each year.

Some of the other expenses you may expect to have for the phone calls, travel, and meetings.

Please note that these are not reimbursable as this type of job is strictly commission-based.


How to Make Money With LegalShield?

This MLM is different only by the fact that you are going to sell services and not a product.

In this particular case, the service you are selling is access to a network of lawyers.

Otherwise, it’s pretty much typical to many MLMs I’ve already reviewed here on my website, which use word-of-mouth marketing and team building.

Also, the LegalShield marketing plan is as much vague as so many MLMs compensation plans out there and it’s really not clear how much money you’d make as an Associate.

One thing that is clear to me is that you’re probably not getting rich here.

As part of the enrollment process, you are going to be asked to create a list of people who you think might be interested in LegalShield services.

This inevitably implies further on selling to your friends and family, maybe your job colleagues.

 

Is LegalShield a Pyramid Scheme? - Sell to Friends and Family Members

 

Traditionally, there are 2 main ways in which you can make money with LegalShield:

#1. Earn Commissions on Sales Generated by You

As a LegalShield Associate, every time you sell a LegalShield plan/membership, you’ll get a commission. The more memberships you can sell on your own, the more money you can make.

For example, if you’d sell the $35,95 per month combination plan that includes both legal services and identity protection, you’d earn $34,57 on that sale.

 

#2. Earn Rewards on Sales Made by People Who You’ve Recruited in Your LegalShield Business

When you start recruiting people into your LegalShield business who’d like to do the same things as you do, (launch their own Legalshield businesses), you then can earn rewards in the form of team overrides (a commission you get paid on someone else’s sale) and car bonuses.

You can also earn a residual income if your customers enjoy their LegalShield memberships and keep them for longer than a year.

If you prefer a video-based content more, here’s a breakdown of the LegalShield Compensation Plan:

 


Does LegalShield Allow You to Use the Internet to Build Your Business?

Unfortunately, I haven’t found any information that would confirm if you are getting or not a replicated website when you become a LegalShield Associate.

But even if you do, that’s not enough to succeed in this business.

Just think about how your replicated website is going to stand out from the rest of the replicated websites of other LegalShield representatives who’ve signed up before you?

MLMs top earners are using expensive marketing systems to get leads and prospects into their businesses. But don’t hurry to get upset if you’re not in the position to pay hundreds of dollars to get your business going.

Stick with me till the end and I’ll show you how you can have a profitable online business that attracts interested (aka targeted) people on its own without you having to pay for advertising if this is what you don’t want to do.


Is LegalShield Legitimate?

Although LegalShield has been involved in a class-action lawsuit alleging the company was a pyramid scheme, the fraud verdict was overturned.

Thus, officially, LegalShield is not a pyramid scheme as they have a real legal service people are getting access to when they pay for their memberships.

But even before deciding to join this LegalShield business opportunity, I want you to think about how are you going to sell these memberships?

Even if you are comfortable with selling to your friends, family, neighbors, etc., you have to remember that there is no base pay and you’ll only get paid for the people who sign up for a full year contract.

And if for any reason, your customers decide to cancel their membership, your commissions will drop out.


Can You Make Money With LegalShield?

To answer this question, it worths taking a look at the LegalShield annual income disclosure statement.

This is an official document that shows how much LegalShield representatives are making per year, on average.

The latest document I’ve found is for 2018:

Is LegalShield a Pyramid Scheme? - Most People Failed to Make Money

To break this down, it’s clear that if you stay consistent with this business, you could make some money after YEARS.

And even with that kind of effort, you’re not going to make much. I mean, could you rely on this income if you’re supposedly making around $20K per year?

I think no, and this means that you’ll need to constantly seek other sources to supplement our income.


The Good and The Bad

PROs

#1. Associate’s Benefits

Once you become a LegalShield Associate, you qualify for discounts and deals from some of the top international brands who’ve partnered with LegalShield (like DELL, UPS, Vehicle Advantage, Moores, and more).

By taking advantage of these benefits, you can save some money on your future purchases.

#2. Access to a Network of Experienced Attorneys and Lawyers

At least, this is what LegalShield states on their official website:

Is LegalShield a Pyramid Scheme? - Access to Experienced Attorneys

#3. Possibility to Get a Quick Response

With LegalShield, you or your customers have the possibility to get your issue sorted within 4 business hours:

Is LegalShield a Pyramid Scheme? - Possibility to Get Issues Sorted Quickly


CONs

#1. Chargebacks

Each time you sell a LegalShield membership, your customer is signing up a contract for the duration of one year.

In this way, you receive commissions from each yearly contract. But if for any reason, a member cancels their contract before the year is up, you’ll be charged back for that commission.

 

Is LegalShield a Pyramid Scheme? - Chargebacks

 

#2. Available Only in the USA and Canada

LegalShield has provider law firms across the United States and Canada, so if you reside there, the legal support you get comes from a lawyer who’s well acquainted with your local laws and regulations.

But if you or your customers live outside of that territory, there is no way for you to run an international business.

#3. Beware of Numerous Lawsuits Around LegalShield

Unfortunately, LegalShield is an MLM that couldn’t avoid the reputation of scandalous lawsuits. There were many in its 40+ years of operation.

To name just a few of them, in 2001, a Wyoming attorney general found that LegalShield was using prohibited income representations to promote their multilevel marketing program.

The company was then ordered to pay $4,000 in lieu of civil penalties, reimbursed the state for $1,000 in costs, and refunded $2,000 to participants who claimed the company had misled them.

Also, in 2004, there were some issues with the impossibility to approve LegalShied financial statements by an independent auditor since there were some “material weaknesses” related to the processing of commissions.

As a result, the Federal Trade Commission (FTC) required LegalShield to make clear for the potential associates that less than 25% of its sales representatives sold multiple insurance plans in 2005.

#4. Most People Failed to Make Money

LegalShield is another MLM company that proves the general trend in this industry: only a very small percentage of people are managing to make a decent amount of money.

#5. Not Everything is Covered

There might be some situations when your customer faces legal issues that fall outside of his/her legal plan.

In this case, he/she will need to pay for the additional services at least 25% off the law firm’s standard hourly rates.

Is LegalShield a Pyramid Scheme? - Not Everything is Covered


My Final Opinion About LegalShield + A Better Alternative

Based on the fact that LegalShield is using the multi-level marketing business model, it’s extremely difficult to make money with it.

Most of the people are already sick and tired of MLMs because these are using pushy sales tactics and have a bad reputation for pyramid schemes.

If you want to dive into MLM, you’ll need to either be a very outgoing person ready to sell to people constantly or spend hundreds of dollars every month on expensive marketing systems, before you can even make any money at all.

And all this hard effort you are putting into something you don’t have full control over since you don’t have the certainty that your company will not get in trouble with the law.

Let me tell you that building your own business shouldn’t be that difficult. There are other inexpensive and secure ways such as making money blogging through the affiliate marketing business model.

It’s better because you don’t have to be selling any product at all and there’s no need to annoy your friends and family members. 

If that sounds appealing to you, there’s an awesome training program that teaches you step-by-step and eliminates all the guesswork. Most importantly, it’s FREE to join so that you can test it out if it’s right for you or not.

But I am sure you are going to love it as it provides all the necessary tools (like keyword research tool, affiliate programs research tool, etc.), 24/7 support from a community of successful affiliate marketers, and even website hosting is included.

If you want to get more info, all you want to do now is to click the red button below:


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I hope you’ve enjoyed reading this article and now, you’ve got an answer to your question: Is LegalShield a Pyramid Scheme? 

If you have any questions, please leave them in the comments section down below and I will get back to you asap!

Maybe you are actual or former LegalShield business representatives, wanting to share your experience, I’d love to hear from you!

I am moderating this website personally and I always reply to each of my readers.

Let’s Make Passive Income Online!

Natalie

LegalShield MLM

$99
5.7

Product

7.0/10

Support

6.0/10

Business Opportunity

4.0/10

Pros

  • Associate's Benefits
  • Access to a Network of Experienced Attorneys and Lawyers
  • Possibility to Get a Quick Response

Cons

  • Chargebacks
  • Most People Failed to Make a Sustainable Income
  • Beware of Lawsuits Around LegalShield

3 thoughts on “Is LegalShield a Pyramid Scheme? – Can You Make Money Selling Legal Services as an MLM Rep?”

  1. hey Natalie,

    Thank you for this super useful review on LegalShield.

    Often times, we get easily fooled by MLM schemes because they make everything they are selling sound so darn awesome that it just makes us believe that they are legit.

    I have seen countless people fall into this trap (me inclusive, unfortunately), which is why it is soo important to have more reviews like yours that warns or makes us aware of everything that we are not able to see about a service that we are interested in.

    I love how you had done your detailed research on LegalShield and anyone looking for info about them wouldn’t need to further investigate once they have read your post here.

    Thanks so much for your efforts and keep doing what you do!

    Cheers,
    Sasha

    Reply
    • Hi, Sasha,

      Thank you for your comment, I’m glad you’ve enjoyed the article.

      I think there’s almost no person that wouldn’t have been involved or approached by an MLM representative, it seems like they are everywhere trying to get you into their business.

      Yeah, it’s important to do deep research on anything you are getting into, especially if it’s an MLM.

      Hope to see you here again, soon.

      Cheers,

      Natalie

      Reply
  2. Hi Natalie,

    I love LegalShield’s idea to help people with affordable prices to cover their legal needs. But, if you are talking about making money through LegalShield’s affiliate program, the possibility to replace your 9-5 jobs seems very low.

    It might be possible to make a few bucks, but that’s all. Not to mention LegalShield also has lawsuits against itself, which sounds ironic. I know that people need legal services once in a while, so I would choose only to become LegalShield’s customer instead of being an affiliate to promote legal services.

    Another downside I found is that they only allow USA & Canada residents to join their affiliate program, so sorry for people who live in other countries! It’s just not my cup of tea, so I might go for your recommendation listed in the last paragraphs.

    Cheers.
    Matt

    Reply

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